Economic Outlook - September 2009

After July’s statistics were released, Norbert J. Ore, chair of the Institute for Supply Management’s Manufacturing Business Survey Committee, said: “The Employment and Inventories Indexes are still contracting, but the rate is slowing and they are moving in the right direction. It is also worth noting that the New Export Orders Index shows growth following nine consecutive months of decline, suggesting that the global economy is recovering. Overall, it would be difficult to convince many manufacturers that we are on the brink of recovery, but the economic outlook suggests that we will see growth in the third quarter if the trends continue.”

Paper Products is one industry that illustrates Ore's point; the following table shows that overall activity, new orders (including export orders) and production all rose for that industry. One Paper Product respondent was quoted as saying, “We believe our inventories are now at the bottom of this cycle, driving stronger demand for raw materials.” The picture was far less rosy for Wood Products, though. In June, the Institute for Supply Management reported the first ray of sunshine to fall on Wood Products since we started tracking that data for Forest2Mill. As the table shows, however, the good news was not repeated in July.

Performance Overview of Wood and Paper Products

Source: Institute for Supply Management, July 2009