Manufacturing contracted in July 2012 as the PMI registered 49.8%, an increase of 0.1 percentage point when compared to June's reading of 49.7%. A reading above 50% indicates that the manufacturing economy is generally expanding; below 50% indicates that it is generally contracting.
A PMI in excess of 42.6%, over a period of time, generally indicates an expansion of the overall economy. Therefore, the July 2012 PMI indicates growth for the 38th consecutive month in the overall economy, but indicates contraction in the manufacturing sector for the second time since July 2009, when the PMI registered 49.2%.
Mr Bradley J Holcomb chair of the Institute for Supply Management Manufacturing Business Survey Committee stated that "The past relationship between the PMI and the overall economy indicates that the average PMI for January through July 2012 (52.5%) corresponds to a 3.3% increase in real gross domestic product. In addition, if the PMI for July 2012 (49.8%) is annualized, it corresponds to a 2.4% increase in real GDP annually."
The last 12 months
Average for 12 months - 52.5
High - 54.8
Low - 49.7
Source - Institute for Supply Management