Down 0.2 points from May, the ISM (Institute for Supply Management) Manufacturing PMI registered 48.5% in June, indicating contraction at a faster rate.
“After breaking a 16-month streak of contraction by expanding in March, the manufacturing sector has contracted the last three months,” says Timothy Fiore, chair of the ISM’s manufacturing business survey committee. “None of five subindexes that directly factor into the Manufacturing PMI were in expansion territory, down from two in May.”
Although 3.9 points higher than May’s figure, the new orders index continues to contract with a reading of 49.3% Anything lower than 50% represents contraction.
The production and employment indexes moved into contraction territory after registering growth in May, falling to 48.5% and 49.3%, respectively.
Eight industries reported growth last month:
- Printing & related support activities
- Petroleum & coal products
- Primary metals
- Furniture & related products
- Paper products
- Chemical products
- Miscellaneous manufacturing
- Nonmetallic mineral products
“Of the six biggest manufacturing industries, only one (chemical products) registered growth in June,” says Fiore.
In the comments of the survey, respondents continue to report a broad mixture of business conditions, and this is especially true when it comes to customer orders and overall demand.
For example, a respondent in the electrical equipment, appliances & components industry reports “customers ordering more to create buffer stocks (in case of) future shortages,” while a fabricated metal products respondent notes “order levels in two of our main divisions are indicating weak demand, and now we must work to reduce inventory levels.”
