ISM: Manufacturing Contracts In July For Ninth Consecutive Month Economic activity in the manufacturing sector contracted in July for the ninth consecutive month following a 28-month period of growth, say the nation's supply executives in the latest Manufacturing ISM Report On Business. The report was issued by Timothy R. Fiore, CPSM, C.P.M., Chair of the Institute for Supply Management (ISM) Manufacturing Business Survey Committee: “The July Manufacturing PMI registered 46.4 percent, 0.4 percentage point higher than the 46 percent record- ed in June. Regarding the overall economy, this figure in- dicates an eighth month of contraction after a 30-month period of expansion. “The New Orders Index remained in contraction terri- tory at 47.3 percent, 1.7 percentage points higher than the figure of 45.6 percent recorded in June. The Production Index reading of 48.3 percent is a 1.6-percentage point increase compared to June's figure of 46.7 percent. The Prices Index registered 42.6 percent, up 0.8 percentage point compared to the June figure of 41.8 percent. “The Backlog of Orders Index registered 42.8 percent, 4.1 percentage points higher than the June reading of 38.7 percent. The Employment Index dropped further into con- traction, registering 44.4 percent, down 3.7 percentage points from June's reading of 48.1 percent. The Supplier Deliveries Index figure of 46.1 percent is 0.4 percentage point higher than the 45.7 percent recorded in June. “In the last eight months, the Supplier Deliveries Index has recorded its eight lowest readings since March 2009 (43.2 percent). (Supplier Deliveries is the only ISM Report On Business index that is inversed; a reading of above 50 percent indicates slower deliveries, which is typical as the economy improves and customer demand increases.) “The Inventories Index increased by 2.1 percentage points to 46.1 percent; the June reading was 44 percent. The New Export Orders Index reading of 46.2 percent is 1.1 percentage points lower than June's figure of 47.3 per- cent. The Imports Index remained in contraction territory, registering 49.6 percent, 0.3 percentage point higher than the 49.3 percent reported in June. Fiore continues, “The U.S. manufacturing sector shrank again, but the uptick in the PMI indicates a marginally slow- er rate of contraction. The July composite index reading reflects companies continuing to manage outputs down as order softness continues. “Demand eased again, with the (1) New Orders Index contracting, though at a slower rate, (2) New Export Or- ders Index moving deeper into contraction and (3) Backlog of Orders Index improving compared to June but remain- ing at a low level. The Customers' Inventories Index read- ing indicated appropriate buyer/supplier tension, which is neutral to slightly positive for future production.” For more information on this report, visit www.ismrob. org .
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