July 2019 Manufacturing ISM Report On Business: Nine Industries Reported Contraction

By Steve Clouther

Category:
Industry Trends

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, and the overall economy grew for the 123rd consecutive month, say the nation’s supply executives in the latest Manufacturing ISM Report On Business.

Manufacturing expanded in July, as the PMI registered 51.2 percent, a decrease of 0.5 percentage point from the June reading of 51.7 percent.  This is the lowest reading since August 2016, when the index registered 49.6 percent.  This indicates growth in manufacturing for the 35th consecutive month.

ISM’s New Orders Index registered 50.8 percent in July, an increase of 0.8 percentage point when compared to the 50 percent reported for June.  This indicates that new orders grew after being unchanged for one month.

ISM’s Production Index registered 50.8 percent in July, which is a decrease of 3.3 percentage points when compared to the 54.1 percent reported for June, indicating growth in production for the 35th consecutive month.

ISM’s Employment Index registered 51.7 percent in July, a decrease of 2.8 percentage points when compared to the June reading of 54.5 percent.  This indicates growth in employment in July for the 34th consecutive month.

The delivery performance of suppliers to manufacturing organizations slowed in July, as the Supplier Deliveries Index registered 53.3 percent.  This is 2.6 percentage points higher than the 50.7 percent reported for June.  This is the 41st straight month of slowing supplier deliveries.

The Inventories Index registered 49.5 percent in July, an increase of 0.4 percentage point from the 49.1 percent reported for June.  The index contracted for the second straight month.

ISM’s Backlog of Orders Index registered 43.1 percent in July, which is 4.3 percentage points lower than the 47.4 percent reported in June, indicating order backlogs contracted for a third consecutive month, at a faster rate in July.

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

 

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