U.S. ISM Manufacturing Index improves Negligibly in July
by:Tom Moeller
|in:Economy in Brief
Summary
- Total index remains near three-year low.
- Widespread component increases countered by employment decline.
- Prices index edges higher from six-month low.
The ISM U.S. manufacturing PMI improved to 46.4 during July from 46.0 in June, according to the Institute for Supply Management. The July index remained below the expansion-contraction level of 50 for the ninth consecutive month and remained below its peak of 63.8 in March 2021. A reading of 46.7 had been expected in the Action Economics Forecast Survey for July.
The new orders index rose to 47.3 last month from 45.6 in June, continuing to suggest a lower orders level. A lessened 15.4% (NSA) of respondents reported higher new orders while 23.4% reported a decline. The production index rose to 48.3 in July after falling to 46.7, suggesting production contracted for the seventh month in the last eight. It stood well below a high of 67.0 in March 2021. A slightly higher 16.4% (NSA) of respondents reported higher production while 19.3% reported lower. The supplier delivery index improved to 46.1 from 45.7 in June. It was the highest level since November. A lessened 7.9% (NSA) of respondents reported slower delivery speeds while 15.8% reported faster. The inventories index rose to 46.1 from 44.0 in June. An increased 12.8% (NSA) of respondents reported more inventories and an increased 22.3% reported fewer.
Countering these increases, the employment series fell to 44.4 from 48.1 in June. It held below the break-even of 50 for the second straight month following two months above it. A greatly lessened 9.4% (NSA) of respondents reported higher employment while an increased 17.4% reported lower.
The prices paid index improved to 42.6 (NSA) in July from 41.8 in June. It was above a low of 39.4 in December 2022 but well below a high of 92.1 in June 2021. A higher 13.9% (NSA) of respondents reported higher prices while an increased 28.7% reported price declines.
In other ISM series not included in the composite index, the new export orders index fell to 46.2 in July after increasing to 47.3 in June. New export orders have contracted eleven times in twelve months. The imports index was little changed at 49.6 in July, but remained well below the level of 54.4 one year earlier. The order backlog index rose to 42.8 from 38.7 in June, indicating falling backlog levels for the tenth consecutive month.
The ISM figures are based on responses from over 400 manufacturing purchasing executives from 20 industries, which correspond to their contribution to GDP in 50 states. These data are diffusion indexes where a reading above 50 indicates expansion. The figures from the Institute for Supply Management can be found in Haver's USECON database; further detail is found in the SURVEYS database. The expectations number is available in Haver's AS1REPNA database.
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
