Psst: The Manufacturing Sector Is on Its Longest Winning Streak in Over a Quarter Century
You probably didn't know that we're living through historically GOOD times for manufacturing in America. Now you will.
For some reason, the The Institute for Supply Management (ISM) hasn't trumpeted this news, even though the history-making began a couple of months ago when it issued its its March report announcing the 34th consecutive month of manufacturing expansion.
(August 1, 2005) The nation's manufacturing sector grew at a faster pace in July (2005), according to a survey of industry executives released Monday that contained lots of good news for Wall Street expectations.The May 2006 report released last week brought the streak to 36 consecutive months.
The Institute of Supply Management's survey of executives at goods-producing companies came in at 56.6, the best reading of 2005 and up from the 53.8 reading in June. The closely watched survey, one of the first economic readings for July, had been forecast to rise to 54.5 in July. Any reading above 50 constitutes growth in the sector, so Monday's survey means that manufacturing has grown for 26 straight months, the longest expansion in the sector in more than 16 years, since nearly three years of uninterrupted growth ended in April 1989.
The current streak is at the top of the chart below. As you'll see, the 1986-1989 streak referred to in CNN's report last year was 33 months (click here to see all history back to 1948; as noted already, a reading above 50 indicates expansion):
In case you're wondering, the average reading during the current streak is 57.3, compared to an average of 55.6 during the 1986-1989 streak.
You have to go back almost 27 years to find a longer streak than the 36-month tear we're currently on. Longer streaks in the time the PMI Manufacturing Survey has been done have been these (all during a time when manufacturers as a whole could usually do no wrong unless it was self-inflicted):
- August 1975 - July 1979 -- 48 months
- February 1971 - August 1974 -- 43 months
- October 1962 - December 1966 -- 51 months
The fact that the current 36-month streak has occurred at a time of unprecedented hypercompetition on a global scale is all the more impressive.
This would be a good tonic to all the gloom and doom about the "death of manufacturing" in the US -- if anyone would notice.
Now someone has.
Cross-posted at BizzyBlog.com.