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
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