According to the Institute for Supply Management’s Manufacturing Purchasing Managers’ Index, activity for June came in slightly below market expectations, with the headline index falling to 53.3, versus the 53.8 consensus. June’s reading fell 0.7 points from 54 in the prior month. A value above 50 reflects expansion in the manufacturing sector. Two of four demand indicators, the New Orders and Backlog of Orders indices, were in expansion. The employment component increased, up 1.1 points to 49.7, but remained in contraction for the 33rd month in a row. The prices paid index dropped 9.1 points to 73, meaning the majority of businesses are paying the same or higher prices.
The ABA Office of the Chief Economist believes the manufacturing sector’s sixth consecutive month of expansion points to the sector’s continued resilience after a 10-month-long period of contraction. Overall activity remained firmly above year-ago levels. Strong manufacturing business activity will continue to support C&I loan demand.
