The 2020 Mid-Year Economic Update_long

ISM: Manufacturing Sector Down Slightly in July

The July Manufacturing PMI registered 59.5%, down 1.1 percentage points from the June reading of 60.6%, according to the latest ISM report.
Manufacturing ISM Report on Business January 2021

Economic activity in the manufacturing sector continued to ramp in July as the overall economy grew for the 14th consecutive month after it had contracted in April of last year, according to the nation’s supply executives in the latest Manufacturing ISM Report On Business. On the flip side, the July Manufacturing PMI registered 59.5% , which was a slight decrease of 1.1 percentage points from the June reading of 60.6%.

“The New Orders Index registered 64.9% decreasing 1.1 percentage points from the June reading of 66%,” according to Timothy R. Fiore, CPSM, C.P.M., chair of the Institute for Supply Management Manufacturing Business Survey Committee. “The Production Index registered 58.4%, a decrease of 2.4 percentage points compared to the June reading of 60.8%.”

The Prices Index registered 85.7% , down 6.4 percentage points compared to the June figure of 92.1% , which was the index’s highest reading since July 1979 (93.1 percent). The Backlog of Orders Index registered 65%,  0.5 percentage point higher than the June reading of 64.5%.

The Employment Index registered 52.9%, which was 3 percentage points higher compared to the June reading of 49.9% . The Supplier Deliveries Index registered 72.5%, down 2.6 percentage points from the June figure of 75.1%.

The Inventories Index registered 48.9%, down 2.2 percentage points than the June reading of 51%. The New Export Orders Index registered 55.7%, a decrease of 0.5 percentage point compared to the June reading of 56.2% . The Imports Index registered 53.7%, a 7.3 percentage point decrease from the June reading of 61%.

“Business Survey Committee panelists reported that their companies and suppliers continue to struggle to meet increasing demand levels,” Fiore said. “As we enter the third quarter, all segments of the manufacturing economy are impacted by near record-long raw-material lead times, continued shortages of critical basic materials, rising commodities prices and difficulties in transporting products. Worker absenteeism, short-term shutdowns due to parts shortages and difficulties in filling open positions continue to be issues limiting manufacturing-growth potential.

“All of the six biggest manufacturing industries — Computer & Electronic Products; Fabricated Metal Products; Chemical Products; Food, Beverage & Tobacco Products; Transportation Equipment; and Petroleum & Coal Products, in that order — registered moderate to strong growth in July.”

Seventeen of 18 manufacturing industries reported growth in July, in the following order: Furniture & Related Products; Printing & Related Support Activities; Apparel, Leather & Allied Products; Miscellaneous Manufacturing; Computer & Electronic Products; Nonmetallic Mineral Products; Machinery; Fabricated Metal Products; Paper Products; Chemical Products; Food, Beverage & Tobacco Products; Primary Metals; Plastics & Rubber Products; Transportation Equipment; Electrical Equipment, Appliances & Components; Wood Products; and Petroleum & Coal Products.

The single industry that reported a decrease in July compared to June was Textile Mills.

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