Economic activity in the manufacturing sector expanded in June, and the overall economy grew for the second consecutive month — after dipping significantly due to the coronavirus — say the nation’s supply executives in the latest Manufacturing ISM Report On Business.
According to Timothy R. Fiore, CPSM, C.P.M., chair of the Institute for Supply Management Manufacturing Business Survey Committee, “This figure indicates expansion in the overall economy for the second straight month after April’s contraction, which ended a period of 131 consecutive months of growth.”
According to the manufacturing sector report, the New Orders Index registered 56.4%, an increase of 24.6 percentage points from the May reading of 31.8%. The Production Index registered 57.3%, up 24.1 percentage points compared to the May reading of 33.2%. The Backlog of Orders Index registered 45.3%, an increase of 7.1 percentage points compared to the May reading of 38.2%. The Employment Index registered 42.1%, an increase of 10 percentage points from the May reading of 32.1%. The Supplier Deliveries Index registered 56.9%, down 11.1 percentage points from the May figure of 68%.
Also, the Inventories Index registered 50.5%, 0.1 percentage point higher than the May reading of 50.4%. The Prices Index registered 51.3%, up 10.5 percentage points compared to the May reading of 40.8%. The New Export Orders Index registered 47.6%, an increase of 8.1 percentage points compared to the May reading of 39.5%. The Imports Index registered 48.8%, a 7.5-percentage point increase from the May reading of 41.3%.
“June signifies manufacturing entering an expected expansion cycle after the disruption caused by the coronavirus (COVID-19) pandemic,” Fiore said. “As predicted, the growth cycle has returned after three straight months of COVID-19 disruptions. Demand, consumption and inputs are reaching parity and are positioned for a demand-driven expansion cycle as we enter the second half of the year.”
Of the 18 manufacturing industries, 13 reported growth in June, in the following order: Textile Mills; Wood Products; Furniture & Related Products; Printing & Related Support Activities; Apparel, Leather & Allied Products; Food, Beverage & Tobacco Products; Computer & Electronic Products; Plastics & Rubber Products; Chemical Products; Miscellaneous Manufacturing; Nonmetallic Mineral Products; Paper Products; and Electrical Equipment, Appliances & Components. The four industries reporting contraction in June are: Transportation Equipment; Primary Metals; Fabricated Metal Products; and Machinery.