The purchasing managers survey on manufacturing showed a return to expansion in June after a month of contraction in May, the Institute for Supply Management reported today. The PMI registered 50.9%, a modest improvement from the 49% registered in May.
“Slow growth continues to choke the recovery. We are not out of the woods yet by any stretch of the imagination," said one procurement official at a chemical products manufacturer.
Of the 18 manufacturing industries, 12 reported growth in June. Only four reported business contracting: textile mills; transportation equipment; chemical products; and computer & electronic products.
The PMI showed a rise of 4.8 percentage points in the production index to 53.4%.
ISM also reported that the U.S. economy grew in June for the 49thconsecutive month. It said the average PMI for January through June corresponded to a 2.9% increase in GDP for the U.S.
The Markit U.S. Manufacturing PMI, also released today, was 51.9, a small drop from May’s 52.3 reading. The Markit survey indicated a slight increase in new orders, but a worrying downward trend in exports, as the new export orders index fell from 49.8 in May to 46.3 in June
“Domestic demand is far from lively, but it is a deteriorating export scene that is causing the real problems,” said Chris Williamson, chief economist at Markit. “Export orders are being lost at the fastest rate since the height of the financial crisis in mid-2009.”
Williamson said the weak new orders picture was depressing the job market in manufacturing.
“The employment picture from the survey is the weakest for almost three-and-a-half years, consistent with roughly 30,000 jobs being lost per month in the manufacturing sector,” Williamson commented.