July ISM PMI Dips 1.5 Points to 56.3

Written by Sandy Williams

Manufacturing activity in the U.S. expanded in July, though the PMI declined 1.5 percentage points to a reading of 56.3, reports the Institute for Supply Management in its latest Manufacturing ISM Report On Business. The PMI has remained above the neutral 50.0 point for 11 consecutive months indicating growth in manufacturing. Although still at robust levels, the indexes for new orders, production, employment and new export orders slowed in July. The price index jumped to 62.0 from 55.0 in June as raw material prices increased for the 17th month.

Export orders continued to be strong, but decreased 2 percentage points to register 57.5 for the month. Primary metals, fabricated metals, machinery and transportation equipment were among those industries reporting growth in new export orders.

Raw material inventories remained low in July. “Several Business Survey Committee Members commented on their concern that inventory may not keep pace with production output going forward,” said Institute for Supply Management Chairman Timothy Fiore.

Selection of comments by survey respondents:

  • “Six profitable months in a row. First time since 2007.” (Fabricated Metal Products)
  • “Business is very steady, but everyone is waiting till the last minute to place their orders.” (Machinery)
  • “Starting to see better order entry and planning on turnaround for 2018.” (Electrical Equipment, Appliances & Components)
  • “Labor shortages are pretty universal, leading to longer lead times through the supply chain. Pricing pressure as community clamors for premium capacity. (Transportation Equipment)
  • “Export orders are continuing to strengthen. The understatement is how stable domestic business is, as well.” (Wood Products)

Below is a graph showing the history of the ISM Manufacturing Index. You will need to view the graph on our website to use its interactive features; you can do so by clicking here. If you need assistance logging into or navigating the website, please contact our office at 800-432-3475 or

Latest in Economy