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Manufacturing Activity Grows Again in June says the ISM

Friday, July 02, 2004

Press release from the issuing company

(Tempe, Arizona) — Economic activity in the manufacturing sector grew in June for the 13th consecutive month, while the overall economy grew for the 32nd consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business . The report was issued today by Norbert J. Ore, C.P.M., chair of the Institute for Supply Management Manufacturing Business Survey Committee and group director, strategic sourcing and procurement, Georgia-Pacific Corporation. "The manufacturing sector grew at a slightly slower, but still aggressive, rate in June. The rate of growth in New Orders and Production remained encouraging as we head into the third quarter. Additionally, the Inventories Index rose above 50 percent, a somewhat rare occurrence, but not unexpected at this stage of a recovery." ISM's Customer Inventories Index indicates that customer inventories are low, while the ISM Prices Index indicates that manufacturers once again experienced higher prices in their purchases. The Backlog of Orders Index indicates that order backlogs increased in June. The New Export Orders and Import Indexes continued to grow in June. Comments from respondents continue to indicate demand is still strong in most industries, but concerns about the cost of energy are repeated numerous times. There are mentions of lengthening leadtimes, but it appears that members are able to work through these issues at this time. ISM's PMI registered 61.1 percent in June, a decrease of 1.7 percentage points when compared to 62.8 percent in May. ISM's New Orders Index declined 2.8 percentage points from 62.8 percent in May to 60 percent in June. ISM's Production Index decreased 1.6 percentage points from 64.8 percent in May to 63.2 percent in June. The ISM Employment Index is at 59.7 percent for June, a decrease of 2.2 percentage points when compared to the 61.9 percent reported in May. ISM's Supplier Deliveries Index registered 68.1 percent, 1.3 percentage points lower than May's 69.4 percent. ISM's Inventories Index registered 51.1 percent in June, up from the 49.3 percent reported in May. ISM's Customers' Inventories Index for June is at 39 percent, an increase of 2 percentage points compared to the May reading of 37 percent. ISM's Prices Index in June is 81 percent, 5 percentage points lower than the 86 percent reported in May. ISM's Backlog of Orders Index decreased 4.5 percentage points, registering 58.5 percent in June compared to 63 percent in May. ISM's New Export Orders Index registered 56.7 percent, a decrease of 3.9 percentage points from May's 60.6 percent. ISM's Imports Index decreased 2.2 percentage points to 57.6 percent in June, down from 59.8 percent in May. "June represents a strong finish to the first half of the year, and the current picture is very encouraging for the third quarter as New Orders and Production are still growing significantly," said Ore. In June, 17 industries reported growth: Instruments & Photographic Equipment; Rubber & Plastic Products; Wood & Wood Products; Industrial & Commercial Equipment & Computers; Electronic Components & Equipment; Petroleum; Fabricated Metals; Miscellaneous*; Chemicals; Paper; Textiles; Apparel; Primary Metals; Leather; Transportation & Equipment; Printing & Publishing; and Furniture.




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