July 2016 Manufacturing ISM Report On Business Shows Manufacturing Growing for The Fifth Consecutive Month

The Manufacturing ISM Report On Business is published monthly by the Institute for Supply Management (ISM), the largest supply management organization in the world, as well as one of the most respected. Economic activity in the manufacturing sector expanded in July for the fifth consecutive month, while the overall economy grew for the 86th consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business.

Manufacturing expanded in July as the PMI registered 52.6 percent, a decrease of 0.6 percentage point from the June reading of 53.2 percent, indicating growth in manufacturing for the fifth consecutive month.

ISM's New Orders Index registered 56.9 percent in July, which is a decrease of 0.1 percentage point when compared to the 57 percent reported for June, indicating growth in new orders for the seventh consecutive month.

ISM's Production Index registered 55.4 percent in July, which is an increase of 0.7 percentage point when compared to the 54.7 percent reported for June, indicating growth in production in July for the seventh consecutive month.

ISM's Employment Index registered 49.4 percent in July, a decrease of 1 percentage point when compared to the June reading of 50.4 percent, indicating contraction in employment in July following one month of growth.

The delivery performance of suppliers to manufacturing organizations was slower in July as the Supplier Deliveries Index registered 51.8 percent, which is 3.6 percentage points lower than the 55.4 percent reported for June.

The Inventories Index registered 49.5 percent in July, which is an increase of 1 percentage point when compared to the 48.5 percent reported for June, indicating raw materials inventories are contracting in July for the 13th consecutive month.

ISM's Backlog of Orders Index registered 48 percent in July, a decrease of 4.5 percentage points when compared to the June reading of 52.5 percent, indicating contraction in order backlogs. Of the 86 percent of respondents who reported their backlog of orders, 16 percent reported greater backlogs, 20 percent reported smaller backlogs, and 64 percent reported no change from June.

Of the 18 manufacturing industries, 11 are reporting growth in July in the following order: Textile Mills; Printing & Related Support Activities; Miscellaneous Manufacturing; Wood Products; Furniture & Related Products; Chemical Products; Food, Beverage & Tobacco Products; Fabricated Metal Products; Nonmetallic Mineral Products; Petroleum & Coal Products; and Computer & Electronic Products. The seven industries reporting contraction in July listed in order are: Apparel, Leather & Allied Products; Electrical Equipment, Appliances & Components; Plastics & Rubber Products; Machinery; Primary Metals; Transportation Equipment; and Paper Products.

Keywords: Automation, Manufacturing, Process Industries, Discrete Industries, Supply Management, PMI, ISM, ARC Advisory Group.