Manufacturing Expansion Cools in July: ISM

Paterniano Del Favero
Agosto 1, 2017

The Institute for Supply Management on Tuesday said its index of USA manufacturing activity fell to 56.3 in July from 57.8 in June. While this report sounds a tad stronger than Markit's report, the ISM Manufacturing index was higher in June with a reading of 57.8.

USA factory activity expanded for the 11th consecutive month in July, highlighting steady economic growth heading into the second half of the year.

Meanwhile, the Dow Jones Industrial Average is on the quest to reach 22,000 - it was up 64 points at 21,955 shortly after Tuesday's economic reports hit the tape.

The CBN's PMI survey report released on Monday noted that production in real subsectors like textile, cement, chemical and pharmaceutical products among others of the nation's economy continued to report growth in production while production in petroleum and coal products; fabricated metal products; furniture and related products; nonmetallic mineral products and plastics and rubber products declined.

The ISM report is based on a survey of 350 purchasing and supply executives. According to CBN, the increase in Manufacturing PMI, indicates expansion in the manufacturing sector for the fourth consecutive month. This was marginally higher than the 53.2 consensus estimate from Bloomberg, but it was more than a point higher than the 52.0 reading released for June.

The institute's New Orders Index was 60.4%, still strong but down from June's red hot 63.5%. Only one industry, apparel, reported a decline in orders.

The Production Index was 60.6% in July, down from 62.4% the month before. Exports were also above the trending averages and production was up above trend, but inventories were flat and delivery times were moderately lower.

The employment index declined to 55.2 from 57.2 the previous month, although this was fractionally above expectations and still suggests overall growth in manufacturing employment.

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