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Economic activity in the manufacturing sector failed to grow in June for the 17th consecutive month, while the overall economy grew for the second consecutive month, according to the latest Manufacturing ISM Report On Business. The PMI in June was 44.8%, an improvement of 2 percentage points over May. A PMI above 50 indicates growth in the manufacturing sector.
The Institute for Supply Management reported: Manufacturing continues to contract at a slower rate, but the trends in the indexes are encouraging as seven of 18 industries reported growth in June. Most encouraging is the gain in the Production Index, which is up 12.1 percentage points in the last two months to 52.5%.
"Aggressive inventory reduction continues and indications are that the de-stocking cycle is at or near the end in most industries, as the Customers' Inventories Index remained below 50% for the third consecutive month. The Prices Index was unchanged from May, indicating that the supply/demand balance is improving."
Seven of the 18 manufacturing industries reported growth in June: Petroleum & Coal Products, Printing & Related Support Activities, Wood Products, Nonmetallic Mineral Products, Miscellaneous Manufacturing, Chemical Products, and Primary Metals.
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