ISM: Manufacturing growth cooled in July; employment still growing

Economic activity in the manufacturing sector expanded in July, and the overall economy grew for the 98th consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business.

The report was issued on August 1st by Timothy R. Fiore, Chair of the Institute for Supply Management (ISM) Manufacturing Business Survey Committee. The report noted:

• The July PMI registered 56.3 percent, a decrease of 1.5 percentage points from the June reading of 57.8 percent. This indicates growth in manufacturing for the 11th consecutive month and is the fourth highest reading in the last 12 months. A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.
• The New Orders Index registered 60.4 percent, a decrease of 3.1 percentage points from the June reading of 63.5 percent. This indicates growth in new orders for the 11th consecutive month. "Order placements remained strong across most industry sectors in spite of seasonality factors including changes in demand and vacation periods," stated Fiore.
• The Production Index registered 60.6 percent in July, which is a decrease of 1.8 percentage points when compared to the 62.4 percent reported for June, indicating growth in production for the 11th consecutive month. "Production remains at strong growth levels in most industries in spite of supplier delivery constraints and the continued need for additional labor," Fiore reported.
• The Employment Index registered 55.2 percent in July, a decrease of 2 percentage points when compared to the June reading of 57.2 percent. This indicates growth in employment in July for the 10th consecutive month. Employment levels have been expanding since October 2016. "Business Survey Committee Members are beginning to mention an increase in turnover, with employees leaving for other opportunities. Overall, labor issues are becoming more prevalent," stated Fiore.

The Manufacturing ISM Report On Business is based on data compiled from purchasing and supply executives nationwide.

Source and more information: Institute for Supply Management.