Manufacturing PMI Falls to 25-Month Low - Modern Distribution Management

Manufacturing PMI Falls to 25-Month Low

It was the slowest expansion since June 2020 as prices took a major month-to-month decline while employment posted improvement.

The latest industrial economic red flag appeared on Aug. 1 when the Institute for Supply Management released its monthly manufacturing Purchasing Managers Index (PMI) — widely regarded as a reliable barometer for the health of the U.S. industrial sector.

ISM’s July PMI showed a figure of 52.8% — its lowest mark since June 2020’s 52.4% during the height of nationwide factory shutdowns amid the worst of COVID-19’s business impacts. July’s reading was 0.2 percentage down points from June.

For the index, any reading above 50.0% indicates expansion, while anything less indicates contraction. July’s reading shows that while the industrial economy expanded for a 26th consecutive month, it was at its slowest pace since that mid-2020 mark.

Within the PMI, indices for new orders, production, prices, backlog and supplier deliveries all saw month-to-month declines. The New Orders Index fell 1.2 points to 48.0%; the Production Index fell 1.4 points to 53.5; the Prices Index fell a whopping 18.5 points 60.0% — its lowest reading since August 2020’s 59.5%; The Backlog of Orders Index fell 1.9 points to 51.3%; and the Supplier Deliveries Index fell 2.1 points to 55.2%.

Indices for employment, inventories, customer inventories, new export orders and imports each saw a month-to-month increase in July. The index for Employment improved 2.6 points to 49.9%; the Inventories Index increased 1.3 points to 57.3%; the Customer Inventories Index increased 4.3 points to 39.5%; the New Export Orders Index gained 1.9 points to 52.6%; and the Imports Index grew 3.7 points to 54.4%.

“The U.S. manufacturing sector continues expanding — though slightly less so in July — as new order rates continue to contract, supplier deliveries improve and prices soften to acceptable levels,” commented Timothy Fiore, CPSM, C.P.M., Chair of the ISM Manufacturing Business Survey Committee.

Related Posts

Share this article

About the Author
Recommended Reading
Leave a Reply

Leave a Comment

Sign Up for the MDM Update Newsletter

The MDM update newsletter is your best source for news and trends in the wholesale distribution industry.

2

articles left

Want more Premium content from MDM?

Subscribe today and get:

  • New issues twice each month
  • Unlimited access to mdm.com, including 10+ years of archived data
  • Current trends analysis, market data and economic updates
  • Discounts on select store products and events

Subscribe to continue reading

MDM Premium Subscribers get:

  • Unlimited access to MDM.com
  • 1 year digital subscription, with new issues twice a month
  • Trends analysis, market data and quarterly economic updates
  • Deals on select store products and events

1

article
left

You have one free article remaining

Subscribe to MDM Premium to get unlimited access. Your subscription includes:

  • Two new issues a month
  • Access to 10+ years of archived data on mdm.com
  • Quarterly economic updates, trends analysis and market data
  • Store and event discounts

To continue reading, you must be an MDM Premium subscriber.

Join other distribution executives who use MDM Premium to optimize their business. Our insights and analysis help you enter the right new markets, turbocharge your sales and marketing efforts, identify business partners that help you scale, and stay ahead of your competitors.

Register for full access

By providing your email, you agree to receive announcements from us and our partners for our newsletter, events, surveys, and partner resources per MDM Terms & Conditions. You can withdraw consent at any time.