ISM: Manufacturing Activity Expands for 5th Month

New orders were essentially unchanged, down 0.1 percent to 56.9. Production increased 0.7 percent to 55.4 for a seventh consecutive month of growth. The employment index indicated a contraction with a reading of 49.4 percent in July, down 1 percentage point from June.

The inventory index increased 1 point to 49.5 percent in July. The customer inventories index was 51.0 percent, the same as June and considered too high.

The index for export orders decreased 1 point to 52.5 for its fifth month in a row of expansion. The imports index remained unchanged for the second consecutive month.

Of the 18 manufacturing industries surveyed, 11 reported growth in July including Fabricated Metals. Primary metals, machinery, and transportation equipment were among the seven industries reporting contraction in July.

Survey respondents had the following comments:

• “International capital orders are increasing.” (Fabricated Metal Products)
• “Retail sales have really slowed in the last 45 days. Our industry is seeing it everywhere. Steel prices are rising.” (Machinery)
• “Demand and industry production are both slowing down.” (Transportation Equipment)
• “Oversupply continues to dominate demand. Poor weather is having a negative impact on building, creating short term slow demand.” (Wood Products)
• “Oil and gas industry sector continues to realign staff to reflect $40-$50/barrel oil. This price range is seen as the new normal for the foreseeable future.” (Petroleum & Coal Products)

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