The manufacturing sector expanded in June, according to supply executives in the latest Manufacturing ISM Report on Business. The June PMI was 53.5 percent, an increase of 0.7 percentage points over the May reading.

The New Orders Index registered 56 percent, an increase of 0.2 percentage points from the reading of 55.8 percent in May. The Production Index registered 54 percent, 0.5 percentage points below the May reading of 54.5 percent.

The Employment Index registered 55.5 percent, 3.8 percentage points above the May reading of 51.7 percent, reflecting growing employment levels from May at a faster rate.

A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.

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.

“The respondent comments to the June ISM survey, while mixed, are indicative of a world of challenge," said Cliff Waldman, director of economic studies for the MAPI Foundation, the research affiliate of the Manufacturers Alliance for Productivity and Innovation. "One respondent revealed that business is holding in the U.S. but is soft in Europe and declining in Asia. A respondent from the machinery sector noted that sales are down from last year, a negative sign for manufacturing strength as a whole. Comments also suggest that the downturn in oil and gas markets is impacting demand in a number of industry sectors."

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