Economy

US Manufacturing Sector Contracts Again: ISM

Written by Laura Miller

August 7, 2023

Economic activity in the US manufacturing sector contracted for the ninth month in a row in July, according to the latest report on business from the Institute for Supply Management (ISM).

The ISM’s manufacturing PMI came in at 46.4% for July. Although this was a 0.4 percentage point increase from the month before, any reading below 50% is still indicative of contraction in the sector.

“This is the ninth month of contraction and continuation of a downward trend that began in June 2022,” said Timothy Fiore, chair of the ISM manufacturing business survey committee.

“Regarding the overall economy, this figure indicates an eighth month of contraction after a 30-month period of expansion,” he added.

The new orders and production portions of the index rose from the month prior but remained in contraction territory at 47.3% and 48.3%, respectively, in July.

“The US manufacturing sector shrank again, but the uptick in the PMI indicates a marginally slower rate of contraction. The July composite index reading reflects companies continuing to manage outputs down as order softness continues.,” Fiore stated, noting that demand eased once again.

One survey respondent from the fabricated metal products segment commented: “Stable demand for the next four to six months, but longer-term uncertainty. While customer growth is projected, we cannot point to fundamentals that sustain it. Supply conditions are similar to pre-pandemic, except for energy and raw input costs. Logistics costs have settled, transit times continue to shorten, and capacities at most suppliers are sufficient.”

Another respondent in transportation equipment said demand is softening, while yet another in primary metals said their order book continues to be strong.

Laura Miller

Laura Miller is a reporter and editor for Steel Market Update. She has held a variety of positions within the steel industry since 2007, including reporting and editing for Steel Business Briefing/Platts, the Association for Iron and Steel Technology, and Kallanish Commodities, as well as marketing for what was then known as ThyssenKrupp Steel USA (now AM/NS Calvert). After a five-year hiatus working across other industries, she returned to steel in 2021 and has covered the flat rolled, tubular, and trade areas of the industry. She is a member of the Association of Women in the Metal Industries and a past-president of the AWMI Pittsburgh Chapter. She holds a BA in Latin American Studies from Edinboro University of Pennsylvania. She can be reached at laura@steelmarketupdate.com or 724-759-7869.

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