U.S. manufacturing increased in July and the manufacturing sector expanded for the second consecutive month, according to a report from the Institute for Supply Management (ISM).
ISM’s manufacturing index rose from 50.9 in June to 55.4 in July. A reading above 50 indicates growth, and a reading below 50 indicates a contraction.
Thirteen of the 18 major manufacturing industries reported growth in July, including furniture and related products; textile mills; printing and related support activities; paper products; wood products; nonmetallic mineral products; electrical equipment, appliances and components; computer and electronic products; food, beverage and tobacco products; primary metals; transportation equipment; chemical products; and fabricated metal products.
Additionally, the employment index increased from 48.7 in June to 54.4 in July, and production increased from 53.4 to 65. New orders increased from 51.9 to 58.3.
“The purchasing managers’ index (PMI™) registered 55.4 percent, an increase of 4.5 percentage points from June’s reading of 50.9 percent,” says Bradley Holcomb, chair of ISM’s manufacturing business survey committee. “July’s PMI reading, the highest of the year, indicates expansion in the manufacturing sector for the second consecutive month.
“The new orders index increased in July by 6.4 percentage points to 58.3 percent, and the production index increased by 11.6 percentage points to 65 percent,” he continues. “The employment index registered 54.4 percent, an increase of 5.7 percentage points compared with June’s reading of 48.7 percent. The prices index registered 49 percent, decreasing 3.5 percentage points from June, indicating that overall raw materials prices decreased from last month. Comments from the panel generally indicate stable demand and slowly improving business conditions.”