The Institute for Supply Management reported on their Manufacturing Index this morning. The ISM Manufacturing Index is one of the most anticipated by those associated with the steel industry as it forecasts future growth. The key is the New Orders section of the index which, for the first time since June 2009, came in below 50.0 which signifies an expansion in that segment of the manufacturing industry.

Overall the ISM Manufacturing Index expanded for the 24th consecutive month as the ISM reported the PMI (Purchasing Manager Index) at 50.9 for the month of July. This represents a 4.4 point decline when compared to the prior month and it also represents the pace of expansion has slowed from the 2011 peak when the ISM PMI was 61.4 during the month of February.

Bradley J. Holcomb, CPSM, CPSD, chair of the Institute for Supply Management, Manufacturing Business Survey Committee reports " Production and employment also showed continued growth in July, but at slower rates than in June. The New Orders Index registered 49.2 percent, indicating contraction for the first time since June of 2009, when it registered 48.9 percent. The rate of increase in prices slowed for the third consecutive month, dropping 9 percentage points in July to 59 percent. In the last three months combined, the Prices Index has declined by 26.5 percentage points, dropping from 85.5 percent in April to 59 percent in July. Despite relief in pricing, however, several comments suggest a slowdown in domestic demand in the short term, while export orders continue to remain strong."

Inventories showed slight contractions as well with a 4.8% decline from June. Customers’ inventories also showed further contractions from June. Exports grew slightly faster than last month with a 0.5% increase from June, while imports grew at a 2.5% faster rate. Ten of 18 manufacturing industries reported growth in July.

Source: Institute for Supply Management