Purchasing Managers Index: Manufacturing Orders, Production Growing
Press release from the issuing company
(Tempe, Arizona) -- July 2, 2002 -- Economic activity in the manufacturing sector grew for the fifth consecutive month in June. The overall economy grew for the eighth 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. "June was a good month for manufacturing. The PMI strengthened as 15 industries saw improvement in production. June's Production Index of 61.4 percent is the highest recorded since June 1999."
ISM's Backlog of Orders Index indicates that order backlogs grew for the fifth consecutive month. ISM's Supplier Deliveries Index reflects slower deliveries for the sixth consecutive month. Manufacturing employment continued to decline in June as the index remained below the breakeven point (an index of 50 percent) for the 21st consecutive month. ISM's Prices Index is above 50 percent as manufacturers experienced higher prices for the fourth consecutive month. New Export Orders grew in June for the sixth consecutive month. June's Imports Index accelerated, while still registering growth for the seventh consecutive month.
Comments from purchasing and supply executives indicate that the manufacturing recovery is gaining momentum, but business is not as strong when looking at year-over-year performance. The weakening U.S. dollar has had an immediate impact on export orders as survey respondents note activity in offshore markets that had been closed due to currency valuations. The recent steel tariffs drove many comments as respondents indicated that the tariffs are moving prices higher and extending deliveries in the industry.
ISM's PMI is 56.2 percent in June, an increase 0.5 percentage point when compared to 55.7 percent reported in May. ISM's New Orders Index declined from 63.1 percent in May to 60.8 percent in June. ISM's Production Index rose 2.9 percentage points from 58.5 percent in May to 61.4 percent in June. The ISM Employment Index is at 49.7 percent for June, an increase of 2.4 percentage points when compared to the 47.3 percent reported in May.
ISM's Supplier Deliveries Index registered 55.2 percent, compared to 53.9 percent in May. ISM's Inventories Index declined to 43.7 percent. ISM's Customer Inventories Index for June is at 44.5 percent, a significant increase when compared to May's 39 percent. ISM's Prices Index in June is 65.5 percent, an increase of 2.5 percentage points from May's 63 percent. ISM's Backlog of Orders Index declined 3 percentage points from 56.5 percent in May to 53.5 percent in June.
ISM's New Export Orders Index registered 54.5 percent, up 1.2 percentage points from May's 53.3 percent. The rate of growth in imports slowed somewhat, as the Imports Index rose from 53.6 percent in May to 55.1 percent in June.
"The growth in manufacturing activity accelerated slightly during June," added Ore. "Steel price increases are drawing a lot of attention from supply managers, and while energy prices have moderated, they are still a concern. Transportation & Equipment; Furniture; and Textiles report a strong upswing in hiring during June. Overall, June was a good month for U.S. manufacturing."
Of the 20 industries in the manufacturing sector, 15 industries reported growth: Textiles; Glass, Stone & Aggregate; Furniture; Paper; Transportation & Equipment; Printing & Publishing; Chemicals; Wood & Wood Products; Fabricated Metals; Food; Instruments & Photographic Equipment; Rubber & Plastic Products; Industrial & Commercial Equipment & Computers; Primary Metals; and Miscellaneous (a preponderance of jewelry, toys, sporting goods, musical instruments).
"Steel; Steel, Coated; and Steel, Flat Rolled are the only commodities reported in short supply. Commodities reported up in price are: Aluminum, Caustic Soda; Copper; Corrugated Containers; Energy; Ethylene; Fuels; Molybdenum; Nickel, Polyethylene, Polyethylene, High Density; Polypropylene; Pulp; Resins, Steel; Steel, Coated; Steel, Cold Rolled, Steel, Flat Rolled; Steel, Pipe & Tubing; and Steel, Stampings. The only commodities reported down in price are: Corrugated Containers and Natural Gas," Ore stated.
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