Supply executives in the latest Manufacturing ISM Report on Business said that economic activity in the manufacturing sector contracted in July for the second time since July 2009; however, the overall economy grew for the 38th consecutive month.
The report was issued by Mr Bradley J Holcomb chair of the Institute for Supply Management Manufacturing Business Survey Committee.
The PMI registered 49.8%, an increase of 0.1 percentage point from June's reading of 49.7%, indicating contraction in the manufacturing sector for the second consecutive month, following 34 consecutive months of expansion. The New Orders Index registered 48%, an increase of 0.2 percentage point from June 2012 and indicating contraction in new orders for the second consecutive month, but at a slightly slower rate. Both the Production Index and the Employment Index remained in growth territory, registering 51.3% and 52%, respectively. The Prices Index for raw materials registered 39.5%, an increase of 2.5 percentage points from the June 2012 reading of 37%, indicating lower prices on average for the third consecutive month. A growing number of comments from the panel this month reflect a slowdown in their businesses and general concern over increasing economic uncertainty.
Of the 18 manufacturing industries, seven are reporting growth in July in the following order: Plastics & Rubber Products; Electrical Equipment, Appliances & Components; Primary Metals; Petroleum & Coal Products; Fabricated Metal Products; Food, Beverage & Tobacco Products; and Furniture & Related Products. The 11 industries reporting contraction in July 2012 listed in order are: Nonmetallic Mineral Products; Apparel, Leather & Allied Products; Wood Products; Textile Mills; Miscellaneous Manufacturing; Chemical Products; Transportation Equipment; Printing & Related Support Activities; Paper Products; Machinery and Computer & Electronic Products.
Manufacturing at a glance July 2012
|Index||Series Index Jul||Series Index Jun||Percentage Point Change||Direction||Rate of Change||Trend (Months)|
|Customers' Inventories||49.5||48.5||1||Too Low||Slower||8|
|Backlog of Orders||43||44.5||-1.5||Contracting||Faster||4|
Source - Institute for Supply Management