Board Converting News, July 12, 2021

ISM: Manufacturing, Economy Grow Again In June

increase of 2.3 percentage points compared to the May reading of 58.5 percent. The Prices Index registered 92.1 percent, up 4.1 percentage points compared to the May figure of 88 percent and the index’s highest reading since July 1979 (93.1 percent). The Backlog of Orders Index reg- istered 64.5 percent, 6.1 percentage points lower than the May reading of 70.6 percent. “The Employment Index registered 49.9 percent; 1 percentage point lower compared to the May reading of 50.9 percent. The Supplier Deliveries Index registered 75.1 percent, down 3.7 percentage points from the May figure of 78.8 percent. The Inventories Index registered 51.1 per- cent, 0.3 percentage point higher than the May reading of 50.8 percent. The New Export Orders Index registered 56.2 percent, an increase of 0.8 percentage point com- pared to the May reading of 55.4 percent. The Imports Index registered 61 percent, a seven percentage point in- crease from the May reading of 54 percent.

Economic activity in the manufacturing sector grew in June, with the overall economy notching a 13th consecu- tive month 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 June Manufacturing PMI®registered 60.6 percent, a decrease of 0.6 percentage point from the May reading of 61.2 percent. This figure indicates expansion in the over- all economy for the 13th month in a row after contraction in April 2020. The New Orders Index registered 66 percent, decreasing 1 percentage point from the May reading of 67 percent. The Production Index registered 60.8 percent, an

“Business Survey Committee panelists reported that their companies and suppli- ers continue to struggle to meet increasing levels of demand. Record-long raw-material lead times, wide-scale shortages of critical basic materials, rising commodities pric- es and difficulties in transporting products are continuing to affect all segments of the manufacturing economy. Worker absen- teeism, short-term shutdowns due to parts shortages, and difficulties in filling open po- sitions continue to be issues that limit manu- facturing-growth potential. Optimistic panel sentiment remained strong, with 16 positive comments for every cautious comment. “Demand expanded, with the (1) New Or- ders Index growing, supported by the New Export Orders Index continuing to expand, (2) Customers’ Inventories Index continuing at very low levels and (3) Backlog of Or- ders Index continuing at a very high level. Consumption (measured by the Production and Employment indexes) improved in the period, posting a combined 1.3 percentage point increase to the Manufacturing PMI calculation. The Employment Index, which held back further expansion, contracted after six straight months of expansion, as panelists continued to note significant dif- ficulties in attracting and retaining labor at their companies’ and suppliers’ facilities. Inputs — expressed as supplier deliveries, inventories, and imports — continued to support input-driven constraints to produc- tion expansion, at higher rates compared to May, due to problems in supplier deliveries. The Prices Index expanded for the 13th con- secutive month.

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July 12, 2021

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