ISM Reports Manufacturing Sector Failed To Grow In July
Tuesday, August 04, 2009
(Tempe, Arizona) - Economic activity in the manufacturing sector failed to grow in July for the 18th consecutive month, while the overall economy grew for the third 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, CPSM, C.P.M., chair of the Institute for Supply Management Manufacturing Business Survey Committee. "The decline in manufacturing was slower in July when compared to June, as the more leading components of the PMI - the New Orders and Production Indexes - rose significantly above 50 percent, thus setting an expectation for future growth in the sector. The Employment and Inventories Indexes are still contracting, but the rate is slowing and they are moving in the right direction. It is also worth noting that the New Export Orders Index shows growth following nine consecutive months of decline, suggesting that the global economy is recovering. Overall, it would be difficult to convince many manufacturers that we are on the brink of recovery, but the data suggests that we will see growth in the third quarter if the trends continue."
PERFORMANCE BY INDUSTRY
Six of the 18 manufacturing industries reported growth in July. These industries - listed in order - are: Nonmetallic Mineral Products; Paper Products; Printing & Related Support Activities; Electrical Equipment, Appliances & Components; Transportation Equipment; and Chemical Products. The 10 industries reporting contraction in July - listed in order - are: Machinery; Plastics & Rubber Products; Wood Products; Textile Mills; Miscellaneous Manufacturing; Furniture & Related Products; Computer & Electronic Products; Food, Beverage & Tobacco Products; Fabricated Metal Products; and Primary Metals.
WHAT RESPONDENTS ARE SAYING ...
- "[There is concern about] overall health of strategic suppliers - continue to see new suppliers filing Chapter 7 or 11, posing significant risk to supply chain." (Machinery)
- "We believe our inventories are now at the bottom of this cycle, driving stronger demand for raw materials." (Paper Products)
- "While our aftermarket business has improved slightly, we are still awaiting an increase in OEM demand." (Transportation Equipment)
- "No stimulus for manufacturing." (Fabricated Metal Products)
- "Looking at another round of shutdowns to align supply with projected demands." (Nonmetallic Mineral Products)
COMMODITIES REPORTED UP/DOWN IN PRICE and IN SHORT SUPPLY
Commodities Up in Price
Aluminum; Copper (2); Copper Based Products; Nickel; Plastic Resins; Polypropylene; Pulp; Solvents; Steel; and Steel Products.
Commodities Down in Price
Caustic Soda (5); Corrugated Containers (7); Diesel Fuel; and Natural Gas.
Commodities in Short Supply
No commodities are reported in short supply.
Note: The number of consecutive months the commodity is listed is indicated after each item.