ISM Manufacturing Index Reports Solid Growth for June

The ISM Manufacturing Index rose to 53.5 points in June, tying the highest reading of the year. Index readings above 50 indicate expansion in the manufacturing economy. Of the 18 component industries, 11 reported growth, down from 14 in May. Some respondents noted that a downturn in oil and gas markets is impacting demand, while others noted that business is soft in Europe and declining in Asia.

The index for new orders increased 0.2 points to 56.0, while inventories rose 1.5 points to 53.0. The difference in these indices closed to 3 points, down from 4.3 points in May, indicating that inventories are beginning to close the gap with current demand.

The employment index rose to 55.5 from 51.7 in May. Of the 18 industries, 10 reported employment growth, down from 14 in May. Three industries – apparel, leather and allied products; machinery; and petroleum and coal products – reported decreases in employment.

Export orders for June registered 49.5 points, indicating that the volume of exports decreased for the month. The imports index registered 53.5 points in June, marking the 29th consecutive month of growth in imports.

The prices index registered 49.5, marking the 8th consecutive month of raw material prices decreasing.