Economic activity in the manufacturing sector expanded in July, and the overall economy grew for the 98th consecutive month, according to the nation’s supply executives in the latest Manufacturing ISM Report On Business.
The Report On Business measures its data using the Purchasing Manager’s Index (PMI), which is an indicator of economic health in the manufacturing sector. The July PMI registered 56.3 percent, a decrease of 1.5 percentage points from the June reading of 57.8 percent. This indicates growth in manufacturing for the 11th consecutive month and is the fourth highest reading in the last 12 months. A reading above 50 percent indicates that the manufacturing economy is generally expanding, while below 50 percent indicates that it is generally contracting, according to the Report On Business.
Timothy R. Fiore, chair of the Institute for Supply Management Manufacturing Business Survey Committee shared some other key manufacturing indicators:
“The New Orders Index registered 60.4 percent, a decrease of 3.1 percentage points from the June reading of 63.5 percent. The Production Index registered 60.6 percent, a 1.8 percentage point decrease compared to the June reading of 62.4 percent. The Employment Index registered 55.2 percent, a decrease of 2 percentage points from the June reading of 57.2 percent. The Supplier Deliveries Index registered 55.4 percent, a 1.6 percentage point decrease from the June reading of 57 percent. The Inventories Index registered 50 percent, an increase of 1 percentage point from the June reading of 49 percent. The Prices Index registered 62 percent in July, an increase of 7 percentage points from the June reading of 55 percent, indicating higher raw materials prices for the 17th consecutive month, with a faster rate of increase in July compared with June.
“Comments from the panel generally reflect expanding business conditions, with new orders, production, employment, backlog and exports all growing in July compared to June, as well as supplier deliveries slowing (improving) and inventories unchanged during the period,” Fiore said.
Of the 18 manufacturing industries, 15 reported growth in July in the following order: Plastics & Rubber Products; Electrical Equipment, Appliances & Components; Wood Products; Fabricated Metal Products; Machinery; Chemical Products; Paper Products; Food, Beverage & Tobacco Products; Printing & Related Support Activities; Computer & Electronic Products; Nonmetallic Mineral Products; Furniture & Related Products; Miscellaneous Manufacturing; Primary Metals; and Transportation Equipment.
Three industries reported contraction in July compared to June: Apparel, Leather & Allied Products; Textile Mills; and Petroleum & Coal Product.
Commodities Up in Price
Aluminum; Caustic Soda; Corn; Corrugate; Corrugated Boxes; Electric Components; LCD Displays; Lumber; Computer Memory; Polypropylene; Precious Metals; Cold and Hot Rolled Steel; Titanium Dioxide; and Wheat.
Commodities Down in Price
Milk Products; and Hot Rolled Steel.
Commodities in Short Supply
Capacitors; Electric Components; Electronic Components; Integrated Circuits; Mechanical Components; Computer Memory; Resistors; and Titanium Dioxide.