Economy

ISM: Manufacturing Activity Falls Slightly in June

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.

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PPD Business Staff

PPD Business, the economy-reporting arm of People's Pundit Daily, is "making sense of current events." We are a no-holds barred, news reporting pundit of, by, and for the people.