Economy

ISM: 8 Months of Decline in Manufacturing Activity
Written by Becca Moczygemba
July 6, 2023
The US manufacturing sector receded for the eighth consecutive month in June, according to the latest monthly report on business from the Institute for Supply Management (ISM).
The ISM’s manufacturing PMI was 46% in June, 0.9% lower than May. The reading marks the seventh month of contraction following a 30-month period of expansion in the overall economy, ISM said.
Recall that a PMI reading above 50% indicates general expansion in the manufacturing sector, while a reading below 50% indicates general contraction.
“The US manufacturing sector shrank again, with the Manufacturing PMI® losing ground compared to the previous month, indicating a faster rate of contraction. The June composite index reading reflects companies continuing to manage outputs down as softness continues and optimism about the second half of 2023 weakens,” said Timothy R. Fiore, chair of the ISM Manufacturing Business Survey Committee.
Transportation equipment reported growth for June, the only one out of the six largest manufacturing industries, according to ISM.
Manufacturing, production, employment, inventories, customers’ inventories, prices, and new export orders all contracted, while new orders, supplier deliveries, backlog orders, and imports saw a slight increase month-over-month.
“Demand remains weak, production is slowing due to lack of work, and suppliers have capacity,” Fiore said. “There are signs of more employment reduction actions in the near term. 71% of manufacturing gross domestic product (GDP) contracted in June, down from 76% in May,”
By Becca Moczygemba, becca@steelmarketupdate.com

Becca Moczygemba
Read more from Becca MoczygembaLatest in Economy

Architecture firms struggle through April
For the third month in a row, architecture firms reported a reduction in billings through April, according to the latest Architecture Billings Index release.

House committee blocks GOP budget proposal
The budget proposal has big implications for steel and manufacturing.

Manufacturing in New York state contracts again in May
Manufacturing activity in New York state declined for the third consecutive month, according to the May Empire State Manufacturing Survey from the Federal Reserve Bank of New York. Responding firms continue to forecast weaker business conditions in the coming months.

Chicago Business Barometer falls back in April, remains in contraction
The Chicago Business Barometer declined in April, reversing March’s gains, according to Market News International (MNI) and the Institute for Supply Management (ISM).

Fewer manufacturers optimistic about the economy
PMA’s April report shows that only 16% of surveyed manufacturers anticipate an increase in economic activity in the next three months (down from 23% in March)