June Manufacturing ISM Report On Business Shows Continued Growth in New Orders, Production, and Employment

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 for the 30th consecutive month, and the overall economy grew for the 73rd consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business.

Manufacturing expanded in June as the PMI registered 53.5 percent, an increase of 0.7 percentage point over the May reading of 52.8 percent, indicating growth in manufacturing for the 30th consecutive month.

ISM's New Orders Index registered 56 percent in June, an increase of 0.2 percentage point when compared to the May reading of 55.8 percent, indicating growth in new orders for the 31st consecutive month.

ISM's Production Index registered 54 percent in June, which is a decrease of 0.5 percentage point when compared to the 54.5 percent reported in May, indicating growth in production for the 34th consecutive month.

ISM's Employment Index registered 55.5 percent in June, which is an increase of 3.8 percentage points when compared to the 51.7 percent reported in May, indicating growth in employment for the second consecutive month.

The delivery performance of suppliers to manufacturing organizations was faster in June as the Supplier Deliveries Index registered 48.8 percent, which is 1.9 percentage points lower than the 50.7 percent reported in May. This is the first month supplier deliveries have been faster than the previous month since October 2012 when the index registered 49.5 percent.

The Inventories Index registered 53 percent in June, which is 1.5 percentage points higher than the 51.5 percent registered in May, indicating raw materials inventories are growing in June for the second consecutive month.

ISM's Backlog of Orders Index registered 47 percent in June, a decrease of 6.5 percentage points as compared to the May reading of 53.5 percent, indicating contraction in order backlogs following one month of growth in the backlog of orders. Of the 89 percent of respondents who measure their backlog of orders, 21 percent reported greater backlogs, 27 percent reported smaller backlogs, and 52 percent reported no change from May.

Of the 18 manufacturing industries, 11 are reporting growth in June in the following order: Furniture & Related Products; Wood Products; Nonmetallic Mineral Products; Miscellaneous Manufacturing; Food, Beverage & Tobacco Products; Electrical Equipment, Appliances & Components; Transportation Equipment; Fabricated Metal Products; Chemical Products; Paper Products; and Computer & Electronic Products. The four industries reporting contraction in June are: Petroleum & Coal Products; Primary Metals; Plastics & Rubber Products; and Machinery.

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