Economy

ISM Report on Business: U.S. Manufacturing Contracted in August

The Institute for Supply Management’s Manufacturing Report On Business Survey. (Photo: REUTERS)

The Manufacturing Report on Business, a gauge of U.S. factory activity by the Institute for Supply Management, fell to 49.4 in August from 52.6 in July. Economists expected a slight decline to 52.0 for the month. Readings above 50 point to expansion, while those below indicate contraction.

“Manufacturing contracted in August for the first time since February of this year, as only six of our 18 industries reported an increase in new orders in August, down from 12 in July),” Bradley J. Holcomb, chair of the Institute for Supply Management Manufacturing Business Survey Committee, said. “Only eight of our 18 industries reported an increase in production in August, down from nine in July.”

Of the 18 manufacturing industries only 6 are reporting growth in August, in the following order: Printing & Related Support Activities; Nonmetallic Mineral Products; Computer & Electronic Products; Miscellaneous Manufacturing; Food, Beverage & Tobacco Products; and Chemical Products.

The remaining 11 industries reporting contraction in August — listed in order — are: Electrical Equipment, Appliances & Components; Apparel, Leather & Allied Products; Plastics & Rubber Products; Furniture & Related Products; Transportation Equipment; Machinery; Textile Mills; Paper Products; Petroleum & Coal Products; Primary Metals; and Fabricated Metal Products.

MANUFACTURING AT A GLANCE August 2016
Index	Series Index Aug	Series Index Jul	Percentage Point Change	Direction	Rate of Change	Trend* (Months)
PMI^®	49.4	52.6	-3.2	Contracting	From Growing	1
New Orders	49.1	56.9	-7.8	Contracting	From Growing	1
Production	49.6	55.4	-5.8	Contracting	From Growing	1
Employment	48.3	49.4	-1.1	Contracting	Faster	2
Supplier Deliveries	50.9	51.8	-0.9	Slowing	Slower	4
Inventories	49.0	49.5	-0.5	Contracting	Faster	14
Customers’ Inventories	49.5	51.0	-1.5	Too Low	From Too High	1
Prices	53.0	55.0	-2.0	Increasing	Slower	6
Backlog of Orders	45.5	48.0	-2.5	Contracting	Faster	2
New Export Orders	52.5	52.5	0.0	Growing	Same	6
Imports	47.0	52.0	-5.0	Contracting	From Growing	1
OVERALL ECONOMY				Growing	Slower	87
Manufacturing Sector				Contracting	From Growing	1

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.