June 2022 Manufacturing ISM Report On Business Indicates Sector Expansion Continues

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 grew in June, with the overall economy achieving a 25th consecutive month of growth, say the nation's supply executives in the latest Manufacturing ISM Report On Business.

Manufacturing grew in June, as the Manufacturing PMI registered 53 percent, 3.1 percentage points lower than the May reading of 56.1 percent. The Manufacturing PMI continued to indicate sector expansion and U.S. economic growth in June.

ISM’s New Orders Index dropped to 49.2 percent in June, a decrease of 5.9 percentage points compared to the 55.1 percent reported in May. This indicates that new order volumes contracted after growing for 24 consecutive months.

The Production Index registered 54.9 percent in June, 0.7 percentage point higher than the May reading of 54.2 percent, indicating growth for the 25th consecutive month.

ISM’s Employment Index registered 47.3 percent in June, 2.3 percentage points below the May reading of 49.6 percent. The index contracted for a second straight month after an eight-month period of expansion.

The delivery performance of suppliers to manufacturing organizations was slower in June, as the Supplier Deliveries Index registered 57.3 percent, 8.4 percentage points lower than the 65.7 percent reported in May.

The Inventories Index registered 56 percent in June, 0.1 percentage point higher than the 55.9 percent reported for May. Manufacturing inventories expanded at a slightly faster rate compared to May.

ISM’s Backlog of Orders Index registered 53.2 percent in June, a 5.5-percentage point decrease compared to the 58.7 percent reported in May, indicating order backlogs expanded for the 24th straight month.

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