worker using torch cutter to cut through metalThe Institute for Supply Management (ISM) has issued its report on business for the manufacturing sector, showing that growth resumed in June after contracting in the prior month. ISM's report was back up at 50.9%, versus consensus estimates of 50.0% from Dow Jones and the 50.5% consensus from Bloomberg. The long and short of the matter is that trends showed growth in the new orders, as well as in production and inventories. Supplier deliveries were unchanged, but the report showed employment contracting in June.

Today's report indicated that manufacturing employment contracted for the first time since September 2009, when the index registered 47.8%. The overall report and comments from the panel signaled slow growth and improving business conditions. Individual components were as follows:

  • New Orders Index increased in June by 3.1 percentage points to 51.9%.
  • Production Index increased by 4.8 percentage points to 53.4%.
  • Employment Index fell by 1.4 points to 48.7%.
  • Prices Index rose by 3 points to 52.5%.

Monday's ISM report said that PMI "registered 50.9 percent, an increase of 1.9 percentage points from May's reading of 49 percent, indicating expansion in the manufacturing sector for the fifth time in the first six months of 2013. ... Manufacturing employment contracted for the first time since September 2009, when the index registered 47.8 percent."

Inventories can present a wild card, as they grew to 50.5 in June from 49.0 in May, but customer inventories were said to be down at 45.0 compared to 46.0 in the prior month. These customer inventories were called "too low," but the backlog of orders also fell to 46.5 in June versus 48.0 in May.


Filed under: Economy

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