Economy
ISM Manufacturing PMI Expands for Fourth Month
Written by Sandy Williams
July 5, 2016
The PMI for the Manufacturing ISM Report on Business rose 1.9 percentage points to 53.2 in June, expanding for the fourth consecutive month.
New orders gained 1.3 points and production 2.1 percentage points for readings of 57.0 and 54.7, respectively. The employment index grew 1.2 points to 50.4 percent.
Inventories of raw materials registered 48.5, up of 3.5 points. The prices index decreased 3 points to 60.5 percent, indicating a fourth month of higher raw material prices.
Export orders were up 1 percent to 53.5 and imports up 2 percent to 52.0.
“I really like this whole report,” said Bradley Holcomb, chair of the ISM Manufacturing Survey Business Committee, in an interview with Modern Materials Handling. “It’s been building and increasing in momentum for the last four-to-six months, and we are finishing the first half of the year on a high note.”
“These metrics all show that things are solidifying and continuing a positive trend after some sluggishness,” he added. “But now things are going the other way. And if you look at some other related news, consumer confidence and spending is up, too, with all things starting and ending with consumers.”
ISM expects manufacturing revenue to rise by 2.8 percent in 2016 and the current report aligns well with that forecast, said Holcomb.
Twelve of 18 industries reported an increase in new orders and production in June. Among the manufacturing industries reporting growth are Petroleum & Coal Products, Fabricated Metal Products, Primary Metals and Machinery.
Respondents in the June survey had the following comments:
- “Very good start of summer for business levels/orders.” (Fabricated Metal Products)
- “Business is steady with some signs of increase.” (Machinery)
- “Business is still strong, but slowing slightly.” (Transportation Equipment)
- “Business conditions are good, production and demand are stable.” (Miscellaneous Manufacturing)
- “Orders are slowing from China. American customers still steady.” (Primary Metals)
Sandy Williams
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