Manufacturing Expands in June - Modern Distribution Management

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Manufacturing Expands in June

PMI up 1.5 percent to 60.2, as new orders remain strong and customers inventories remain low.

Manufacturing activity continued to expand in June and the overall economy grew for the 110th straight month, according to the latest Report on Business from the Institute for Supply Management.

The June Purchasing Managers’ Index (PMI) registered 60.2, a 1.5 percentage-point increase over May’s reading of 58.7. The reading exceeds the 12-month average of 59, but fell just short of the 12-month high of 60.8. A reading above 50 indicates growth in the sector; a reading below 50 indicates contraction.

ISM reported that demand remains strong, as its New Orders Index registered 60 percent or higher for the 14th consecutive month, and the Customers’ Inventories Index remained low for the 21st consecutive month. The Backlog of Orders Index continued to expand, ISM said, reading 60 percent or higher for the third straight month.

Concerns remain despite the strong outlook, as lead times extend, steel and aluminum disruptions continue, and labor- and transportation-related issues linger, ISM also said.

“… Demand remains robust, but the nation's employment resources and supply chains continue to struggle. Respondents are overwhelmingly concerned about how tariff related activity is and will continue to affect their business," said Timothy R. Fiore, chairman of ISM’s Manufacturing Business Survey Committee.


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