The Institute for Supply Management’s Manufacturing Report On Business Survey. (Photo: REUTERS)
The Manufacturing Report on Business, a gauge of factory activity by the Institute for Supply Management, fell to 52.6 in July from 53.2 in June. The results missed the median economic forecast, as economists’ expected a less stark decline to 53.0 for the month.
Readings above 50 show expansion in the manufacturing, while those below indicate contraction.
The New Orders Index came in at 56.9%, a decline of 0.1 percentage point from June. The Production Index was 55.4%, a 0.7 percentage point increase and the Employment Index was 49.4%, a decline of 1%. Inventories of raw materials were 49.5%, a gain of 1% from the month prior. The Prices Index was 55%, a decrease of 5.5%, which suggests higher raw materials prices for the fifth consecutive month.
The manufacturing sector, though weak, grew in July for the fifth consecutive month, as 12 of our 18 industries reported an increase in new orders in July (same as in June), and 9 of 18 industries reported an increase in production in July (down from 12 in June).
Of the 18 manufacturing industries, 11 are reporting growth in July in the following order: Textile Mills; Printing & Related Support Activities; Miscellaneous Manufacturing; Wood Products; Furniture & Related Products; Chemical Products; Food, Beverage & Tobacco Products; Fabricated Metal Products; Nonmetallic Mineral Products; Petroleum & Coal Products; and Computer & Electronic Products. The seven industries reporting contraction in July — listed in order — are: Apparel, Leather & Allied Products; Electrical Equipment, Appliances & Components; Plastics & Rubber Products; Machinery; Primary Metals; Transportation Equipment; and Paper Products.
| MANUFACTURING AT A GLANCE JULY 2016 |
||||||
|---|---|---|---|---|---|---|
| Index | Series Index Jul |
Series Index Jun |
Percentage Point Change |
Direction | Rate of Change |
Trend* (Months) |
| PMI® | 52.6 | 53.2 | -0.6 | Growing | Slower | 5 |
| New Orders | 56.9 | 57.0 | -0.1 | Growing | Slower | 7 |
| Production | 55.4 | 54.7 | +0.7 | Growing | Faster | 7 |
| Employment | 49.4 | 50.4 | -1.0 | Contracting | From Growing | 1 |
| Supplier Deliveries | 51.8 | 55.4 | -3.6 | Slowing | Slower | 3 |
| Inventories | 49.5 | 48.5 | +1.0 | Contracting | Slower | 13 |
| Customers’ Inventories | 51.0 | 51.0 | 0.0 | Too High | Same | 2 |
| Prices | 55.0 | 60.5 | -5.5 | Increasing | Slower | 5 |
| Backlog of Orders | 48.0 | 52.5 | -4.5 | Contracting | From Growing | 1 |
| New Export Orders | 52.5 | 53.5 | -1.0 | Growing | Slower | 5 |
| Imports | 52.0 | 52.0 | 0.0 | Growing | Same | 2 |
| OVERALL ECONOMY | Growing | Slower | 86 | |||
| Manufacturing Sector | Growing | Slower | 5 | |||
Manufacturing ISM® Report On Business® data is seasonally adjusted for New Orders, Production, Employment and Supplier Deliveries indexes.
*Number of months moving in current direction.
