July Manufacturing Numbers Grow According to ISM Report
Press release from the issuing company
(Tempe, Arizona) — Economic activity in the manufacturing sector grew in July for the 14th consecutive month, while the overall economy grew for the 33rd 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 continues to grow at a rapid rate as the PMI has now been above 60 percent for nine consecutive months. This is the longest period of growth above 60 percent since the 12-month period of July 1972 through June 1973, when the index was over 60 percent each month and reached a high of 72.1 percent in January 1973. The growth of New Orders and Production accelerated during the month, adding strength to the index. Employment grew at a slower rate, while the Inventories Index declined."
The ISM Prices Index continues to moderate, but the prices manufacturers pay are still an issue. ISM's Customers' Inventories Index indicates that customer inventories are too low at this time. The Backlog of Orders Index indicates that order backlogs increased in July. The New Export Orders and Import Indexes continued to grow in July.
Comments from respondents indicate that many consider their business to be "strong" with a number indicating significant year-over-year improvement. Others continue to indicate only minor improvement. Energy prices remain a major concern for purchasers, as prices are at or near record highs. It appears that the steel supply situation has improved as there are fewer mentions of shortages.
ISM's PMI registered 62 percent in July, an increase of 0.9 percentage point when compared to 61.1 percent in June. ISM's New Orders Index gained 4.7 percentage points from 60 percent in June to 64.7 percent in July. ISM's Production Index increased 2.9 percentage points from 63.2 percent in June to 66.1 percent in July. The ISM Employment Index is at 57.3 percent for July, a decrease of 2.4 percentage points when compared to the 59.7 percent reported in June.
ISM's Supplier Deliveries Index registered 64.2 percent, 3.9 percentage points lower than June's 68.1 percent. ISM's Inventories Index registered 49.9 percent in July, down from the 51.1 percent reported in June. ISM's Customers' Inventories Index for July is at 37.5 percent, a decrease of 1.5 percentage points compared to the June reading of 39 percent. ISM's Prices Index in July is 77 percent, 4 percentage points lower than the 81 percent reported in June.
ISM's Backlog of Orders Index decreased 0.5 percentage point, registering 58 percent in July compared to 58.5 percent in June. ISM's New Export Orders Index registered 56.2 percent, a decrease of 0.5 percentage point from June's 56.7 percent. ISM's Imports Index increased 2.3 percentage points to 59.9 percent in July, up from 57.6 percent in June.
"July represents a good start for the third quarter, and the outlook continues to be very encouraging as New Orders and Production accelerated during the month," said Ore.
In July, 18 industries reported growth: Instruments & Photographic Equipment; Furniture; Paper; Miscellaneous*; Wood & Wood Products; Industrial & Commercial Equipment & Computers; Tobacco; Rubber & Plastic Products; Fabricated Metals; Food; Electronic Components & Equipment; Leather; Chemicals; Transportation & Equipment; Primary Metals; Printing & Publishing; Glass, Stone & Aggregate; and Textiles.
"Adhesives; Aluminum; Aluminum Castings; Carbon Steel; Cardboard; Caustic Soda; Chemicals; Coal; Corrugated Cartons; Diesel Fuel; Electronic Components; Energy; Freight; Fuel Oil; Gasoline; HDPE Products; Hardwood Lumber; LDPE Products; Linerboard; Machine Parts; Natural Gas; Oil Products; Packaging; Paper; Particle Board; Plastic Products; Polymers; Stainless Steel Products; Steel; Steel Scrap; Transportation; and Wire are the commodities listed as up in price. The commodities listed in short supply are DRAMs; Electronic Components; Paper; Stainless Steel; Steel; and Steel Products (various forms). The commodities reported down in price are Fuel Oil; Gasoline; and Natural Gas," Ore stated.
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