June 2017 Manufacturing ISM Report On Business Says Manufacturing’s PMI Hits Highest Level Since August 2014

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 June, and the overall economy grew for the 97th consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business

Manufacturing expanded in June as the PMI registered 57.8 percent, an increase of 2.9 percentage points from the May reading of 54.9 percent and its highest level since August 2014, when it registered 57.9 percent. This indicates growth in manufacturing for the 10th consecutive month.

ISM's New Orders Index registered 63.5 percent in June, which is an increase of 4 percentage points when compared to the 59.5 percent reported for May, indicating growth in new orders for the 10th consecutive month. New orders returned to the above-60 level last seen in March 2017 and continues to signal strong order intake for calendar year 2017.

ISM's Production Index registered 62.4 percent in June, which is an increase of 5.3 percentage points when compared to the 57.1 percent reported for May, indicating growth in production for the 10th consecutive month and reaching its highest level since February 2017 when it registered 62.9 percent.

ISM's Employment Index registered 57.2 percent in June, an increase of 3.7 percentage points when compared to the May reading of 53.5 percent and its highest level since March 2017, when it registered 58.9 percent. This indicates growth in employment in June for the ninth consecutive month. Employment levels have been expanding since October 2016.

The delivery performance of suppliers to manufacturing organizations was slower in June, as the Supplier Deliveries Index registered 57 percent, which is 3.9 percentage points higher than the 53.1 percent reported for May. This is the 14th straight month of slowing supplier deliveries. The index is at its highest level since December 2014, when it registered 58.3 percent, indicating supply chains continue to adjust to strong demand levels.

The Inventories Index registered 49 percent in June, which is a decrease of 2.5 percentage points when compared to the 51.5 percent reported for May, indicating raw materials inventories are contracting in June.

ISM's Backlog of Orders Index registered 57 percent in June, an increase of 2 percentage points from the 55 percent reported for May, indicating growth in order backlogs for the fifth consecutive month. Of the 91 percent of respondents who reported their backlog of orders, 29 percent reported greater backlogs, 15 percent reported smaller backlogs, and 56 percent reported no change from May.

Of the 18 manufacturing industries, 15 reported growth in June in the following order: Furniture & Related Products; Nonmetallic Mineral Products; Paper Products; Machinery; Electrical Equipment, Appliances & Components; Chemical Products; Transportation Equipment; Computer & Electronic Products; Food, Beverage & Tobacco Products; Plastics & Rubber Products; Printing & Related Support Activities; Fabricated Metal Products; Wood Products; Miscellaneous Manufacturing; and Petroleum & Coal Products. Three industries reported contraction in June compared to May: Apparel, Leather & Allied Products; Textile Mills; and Primary Metals.

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