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) |
| PMI | 49.8 | 49.7 | 0.1 | Contracting | Slower | 2 |
| New Orders | 48 | 47.8 | 0.2 | Contracting | Slower | 2 |
| Production | 51.3 | 51 | 0.3 | Growing | Faster | 38 |
| Employment | 52 | 56.6 | -4.6 | Growing | Slower | 34 |
| Supplier Deliveries | 48.7 | 48.9 | -0.2 | Faster | Faster | 6 |
| Inventories | 49 | 44 | 5 | Contracting | Slower | 4 |
| Customers' Inventories | 49.5 | 48.5 | 1 | Too Low | Slower | 8 |
| Prices | 39.5 | 37 | 2.5 | Decreasing | Slower | 3 |
| Backlog of Orders | 43 | 44.5 | -1.5 | Contracting | Faster | 4 |
| Exports | 46.5 | 47.5 | -1 | Contracting | Faster | 2 |
| Imports | 50.5 | 53.5 | -3 | Growing | Slower | 8 |
| OVERALL ECONOMY | Growing | Faster | 38 | |||
| Manufacturing Sector | Contracting | Slower | 2 |
Source - Institute for Supply Management
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