The U.S. manufacturing sector contracted in July for the fifth consecutive month, following a two-month expansion that was preceded by 26 straight months of contraction. The ISM Manufacturing PMI registered 48% in July.
The July Manufacturing PMI® indicates the overall economy grew for the 63rd straight month after last contracting in April 2020. (A Manufacturing PMI® above 42.3%, over a period of time, generally indicates an expansion of the overall economy.)
The Production Index registered 51.4% in July, 1.1 percentage points (pp) higher than June’s figure of 50.3%. The Prices Index remained in expansion (or “increasing”) territory, registering 64.8% in July, down 4.9 pp compared to the June reading of 69.7%. The Backlog of Orders Index registered 46.8 percent, up 2.5 pp compared to the 44.3% recorded in June.
The Employment Index registered 43.4% in July, 1.6 pp lower than June’s reading of 45%. The New Orders Index contracted in July for the sixth consecutive month after three consecutive months of expansion, registering 47.1%, an increase of 0.7 pp compared to June’s figure of 46.4%.
The New Export Orders Index contracted in July, registering 46.1%, down 0.2 pp from June’s reading of 46.3%. Of the 18 manufacturing industries, the only industry reporting growth in new export orders in July is Furniture & Related Products.
The Imports Index remained in contraction for the fourth month, registering 47.6% in July. The five industries reporting an increase in import volumes in July are: Textile Mills; Food, Beverage & Tobacco Products; Plastics & Rubber Products; Miscellaneous Manufacturing; and Fabricated Metal Products.
The Customers’ Inventories Index registered 45.7% in July, down 1.0 pp compared to the reading of 46.7% reported in June. The Inventories Index registered 48.9%, a decrease of 0.3 pp from June’s 49.2%.
Read the ISM release.
