ISM: Manufacturing, Economy (CONT’D FROM PAGE 8)
abating and import levels re-entering expansion. Inven- tory levels contracted due to strong production output, supplier delivery difficulties and inventory minimization. Inputs contributed negatively (a combined 4.6-percent- age point decrease) to the PMI calculation but were more than offset by the demand and consumption improve- ment, as was the case in June. (The Supplier Deliveries and Inventories indexes directly factor into the PMI®; the Imports Index does not.) Prices remained in expansion, supporting a positive outlook. “The growth cycle continues for the second straight month after three prior months of COVID-19 disruptions. Demand and consumption continued to drive expansion growth, with inputs remaining at parity with supply and demand. Among the six biggest industry sectors, Food, Beverage & Tobacco Products remains the best-perform- ing industry sector, with Chemical Products, Computer & Electronic Products and Petroleum & Coal Products growing respectably. Transportation Equipment and Fab- ricated Metal Products continue to contract, but at soft levels,” says Fiore. Of the 18 manufacturing industries, 13 reported growth in July, among them: Wood Products, Furniture & Relat- ed Products, Printing & Related Support Activities, Food, Beverage & Tobacco Products, Computer & Electronic Products, and Miscellaneous Manufacturing. The three industries reporting contraction in July are Transportation Equipment, Machinery, and Fabricated Metal Products.
“The Inventories Index registered 47 percent, 3.5 percentage points lower than the June reading of 50.5 percent. The Prices Index registered 53.2 percent, up 1.9 percentage points compared to the June reading of 51.3 percent. The New Export Orders Index registered 50.4 percent, an increase of 2.8 percentage points compared to the June reading of 47.6 percent. The Imports Index registered 53.1 percent, a 4.3-percentage point increase from the June reading of 48.8 percent. “In July, manufacturing continued its recovery after the disruption caused by the coronavirus (COVID-19) pandemic. Panel sentiment was generally optimistic (two positive comments for every one cautious comment), con- tinuing a trend from June. Demand expanded, with the (1) New Orders Index growing at a strong level, supported by the New Export Orders Index re-entering expansion; (2) Customers’ Inventories Index remaining at a level con- sidered a positive for future production, and (3) Backlog of Orders Index returning to expansion for the first time in five months. Consumption (measured by the Production and Employment indexes) contributed positively (a com- bined seven-percentage point increase) to the PMI calcu- lation, with industries continuing to expand output after May’s return-to-work actions. Inputs— expressed as sup- plier deliveries, inventories and imports — weakened for the third straight month, due to supplier delivery issues
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