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PMI® at 60.2; June Manufacturing ISM® Report On Business®New Orders, Production, and Employment Growing Supplier Deliveries Slowing at Faster Rate; Backlog Growing Raw Materials Inventories Growing; Customers' Inventories Too Low Prices Increasing at Slower Rate; Exports and Imports Growing TEMPE, Ariz., July 2, 2018 /PRNewswire/ -- Economic activity in the manufacturing sector expanded in June, and the overall economy grew for the 110th consecutive month, say the nation's supply executives in the latest Manufacturing ISM® Report On Business®. The report was issued today by Timothy R. Fiore, CPSM, C.P.M., Chair of the Institute for Supply Management® (ISM®) Manufacturing Business Survey Committee: "The June PMI® registered 60.2 percent, an increase of 1.5 percentage points from the May reading of 58.7 percent. The New Orders Index registered 63.5 percent, a decrease of 0.2 percentage point from the May reading of 63.7 percent. The Production Index registered 62.3 percent, a 0.8 percentage point increase compared to the May reading of 61.5 percent. The Employment Index registered 56 percent, a decrease of 0.3 percentage point from the May reading of 56.3 percent. The Supplier Deliveries Index registered 68.2 percent, a 6.2 percentage point increase from the May reading of 62 percent. The Inventories Index registered 50.8 percent, an increase of 0.6 percentage point from the May reading of 50.2 percent. The Prices Index registered 76.8 percent in June, a 2.7 percentage point decrease from the May reading of 79.5 percent, indicating higher raw materials prices for the 28th consecutive month. "Comments from the panel reflect continued expanding business strength. Demand remains strong, with the New Orders Index at 60 percent or above for the 14th straight month, and the Customers' Inventories Index remaining low. The Backlog of Orders Index continued to expand, reading at 60 percent of higher for the third consecutive month. Consumption, described as production and employment, continues to expand in spite of labor, skill and material shortages. Inputs, expressed as supplier deliveries, inventories and imports, had expansion increases, due primarily to negative supply chain issues. Lead-time extensions, steel and aluminum disruptions, supplier labor issues, and transportation difficulties continue. Export orders expanded at higher rates. Price pressure remains strong, but the index saw its first expansion softening since November 2017. Demand remains robust, but the nation's employment resources and supply chains continue to struggle. Respondents are overwhelmingly concerned about how tariff related activity is and will continue to affect their business," says Fiore. Of the 18 manufacturing industries, 17 reported growth in June, in the following order: Textile Mills; Wood Products; Nonmetallic Mineral Products; Printing & Related Support Activities; Electrical Equipment, Appliances & Components; Fabricated Metal Products; Computer & Electronic Products; Food, Beverage & Tobacco Products; Paper Products; Transportation Equipment; Furniture & Related Products; Machinery; Primary Metals; Miscellaneous Manufacturing; Chemical Products; Petroleum & Coal Products; and Plastics & Rubber Products. No industry reported a decrease in June compared to May. WHAT RESPONDENTS ARE SAYING
Manufacturing ISM® Report On Business® data is seasonally adjusted for the New Orders, Production, Employment and Supplier Deliveries Indexes. COMMODITIES REPORTED UP/DOWN IN PRICE AND IN SHORT SUPPLY Commodities Up in Price Commodities Down in Price Commodities in Short Supply The number of consecutive months the commodity is listed is indicated after each item. JUNE 2018 MANUFACTURING INDEX SUMMARIES PMI® A PMI® above 43.2 percent, over a period of time, generally indicates an expansion of the overall economy. Therefore, the June PMI® indicates growth for the 110th consecutive month in the overall economy and the 22nd straight month of growth in the manufacturing sector. "The past relationship between the PMI® and the overall economy indicates that the PMI® for June (60.2 percent) corresponds to a 5.2 percent increase in real gross domestic product (GDP) on an annualized basis." THE LAST 12 MONTHS
New Orders Sixteen of 18 industries reported growth in new orders in June, listed in the following order: Textile Mills; Furniture & Related Products; Wood Products; Printing & Related Support Activities; Transportation Equipment; Nonmetallic Mineral Products; Plastics & Rubber Products; Computer & Electronic Products; Fabricated Metal Products; Food, Beverage & Tobacco Products; Chemical Products; Electrical Equipment, Appliances & Components; Machinery; Primary Metals; Miscellaneous Manufacturing; and Paper Products. The only industry reporting a decrease in new orders in June compared to May is Apparel, Leather & Allied Products.
Production The 16 industries reporting growth in production during the month of June — listed in order — are: Textile Mills; Furniture & Related Products; Nonmetallic Mineral Products; Printing & Related Support Activities; Wood Products; Chemical Products; Electrical Equipment, Appliances & Components; Fabricated Metal Products; Food, Beverage & Tobacco Products; Primary Metals; Transportation Equipment; Computer & Electronic Products; Petroleum & Coal Products; Miscellaneous Manufacturing; Machinery; and Paper Products. The only industry reporting a decrease in production in June compared to May is Apparel, Leather & Allied Products.
Employment Of the 18 manufacturing industries, the 13 reporting employment growth in June — listed in order — are: Textile Mills; Paper Products; Computer & Electronic Products; Transportation Equipment; Petroleum & Coal Products; Primary Metals; Machinery; Food, Beverage & Tobacco Products; Plastics & Rubber Products; Fabricated Metal Products; Nonmetallic Mineral Products; Miscellaneous Manufacturing; and Chemical Products. No industry reported a decrease in employment in June compared to May.
Supplier Deliveries The 15 industries reporting slower supplier deliveries in June — listed in order — are: Wood Products; Textile Mills; Computer & Electronic Products; Fabricated Metal Products; Machinery; Apparel, Leather & Allied Products; Paper Products; Petroleum & Coal Products; Transportation Equipment; Food, Beverage & Tobacco Products; Miscellaneous Manufacturing; Electrical Equipment, Appliances & Components; Nonmetallic Mineral Products; Chemical Products; and Primary Metals. No industries reported faster supplier deliveries in June compared to May.
Inventories* The 10 industries reporting higher inventories in June — listed in order — are: Apparel, Leather & Allied Products; Printing & Related Support Activities; Wood Products; Electrical Equipment, Appliances & Components; Nonmetallic Mineral Products; Food, Beverage & Tobacco Products; Paper Products; Miscellaneous Manufacturing; Primary Metals; and Machinery. The three industries reporting lower inventories in June are: Transportation Equipment; Chemical Products; and Computer & Electronic Products.
Customers' Inventories* No manufacturing industries reported customers' inventories as too high during the month of June. The 14 industries reporting customers' inventories as too low during June — listed in order — are: Wood Products; Apparel, Leather & Allied Products; Plastics & Rubber Products; Petroleum & Coal Products; Nonmetallic Mineral Products; Electrical Equipment, Appliances & Components; Transportation Equipment; Machinery; Miscellaneous Manufacturing; Fabricated Metal Products; Computer & Electronic Products; Paper Products; Food, Beverage & Tobacco Products; and Chemical Products.
Prices* All 18 industries reported paying increased prices for raw materials in June, in the following order: Apparel, Leather & Allied Products; Textile Mills; Printing & Related Support Activities; Fabricated Metal Products; Furniture & Related Products; Paper Products; Machinery; Chemical Products; Electrical Equipment, Appliances & Components; Computer & Electronic Products; Nonmetallic Mineral Products; Primary Metals; Wood Products; Miscellaneous Manufacturing; Transportation Equipment; Food, Beverage & Tobacco Products; Petroleum & Coal Products; and Plastics & Rubber Products.
Backlog of Orders* The 12 industries reporting growth in order backlogs in June — listed in order — are: Printing & Related Support Activities; Computer & Electronic Products; Textile Mills; Petroleum & Coal Products; Paper Products; Fabricated Metal Products; Transportation Equipment; Machinery; Primary Metals; Furniture & Related Products; Chemical Products; and Plastics & Rubber Products. The two industries reporting a decrease in order backlogs during June are: Apparel, Leather & Allied Products; and Food, Beverage & Tobacco Products.
New Export Orders* The 10 industries reporting growth in new export orders in June — listed in order — are: Furniture & Related Products; Fabricated Metal Products; Chemical Products; Paper Products; Computer & Electronic Products; Food, Beverage & Tobacco Products; Plastics & Rubber Products; Miscellaneous Manufacturing; Machinery; and Transportation Equipment. The two industries reporting a decrease in new export orders in June as compared to May are: Primary Metals; and Electrical Equipment, Appliances & Components. Six industries reported no change in new export orders in June compared to May.
Imports* The 14 industries reporting growth in imports during the month of June — listed in order — are: Printing & Related Support Activities; Nonmetallic Mineral Products; Electrical Equipment, Appliances & Components; Fabricated Metal Products; Computer & Electronic Products; Primary Metals; Miscellaneous Manufacturing; Petroleum & Coal Products; Furniture & Related Products; Chemical Products; Transportation Equipment; Food, Beverage & Tobacco Products; Plastics & Rubber Products; and Machinery. The only industry that reported a decrease in imports during June compared to May is Apparel, Leather & Allied Products.
*The Inventories, Customers' Inventories, Prices, Backlog of Orders, New Export Orders and Imports Indexes do not meet the accepted criteria for seasonal adjustments. Buying Policy
About This Report The data presented herein is obtained from a survey of manufacturing supply executives based on information they have collected within their respective organizations. ISM® makes no representation, other than that stated within this release, regarding the individual company data collection procedures. The data should be compared to all other economic data sources when used in decision-making. Data and Method of Presentation Survey responses reflect the change, if any, in the current month compared to the previous month. For each of the indicators measured (New Orders, Backlog of Orders, New Export Orders, Imports, Production, Supplier Deliveries, Inventories, Customers' Inventories, Employment and Prices), this report shows the percentage reporting each response, the net difference between the number of responses in the positive economic direction (higher, better and slower for Supplier Deliveries) and the negative economic direction (lower, worse and faster for Supplier Deliveries), and the diffusion index. Responses are raw data and are never changed. The diffusion index includes the percent of positive responses plus one-half of those responding the same (considered positive). The resulting single index number for those meeting the criteria for seasonal adjustments (PMI®, New Orders, Production, Employment and Supplier Deliveries) is then seasonally adjusted to allow for the effects of repetitive intra-year variations resulting primarily from normal differences in weather conditions, various institutional arrangements, and differences attributable to non-moveable holidays. All seasonal adjustment factors are subject annually to relatively minor changes when conditions warrant them. The PMI® is a composite index based on the diffusion indexes of five of the indexes with equal weights: New Orders (seasonally adjusted), Production (seasonally adjusted), Employment (seasonally adjusted), Supplier Deliveries (seasonally adjusted), and Inventories. Diffusion indexes have the properties of leading indicators and are convenient summary measures showing the prevailing direction of change and the scope of change. A PMI® reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally declining. A PMI® above 43.2 percent, over a period of time, indicates that the overall economy, or gross domestic product (GDP), is generally expanding; below 43.2 percent, it is generally declining. The distance from 50 percent or 43.2 percent is indicative of the extent of the expansion or decline. With some of the indicators within this report, ISM® has indicated the departure point between expansion and decline of comparable government series, as determined by regression analysis. The Manufacturing ISM® Report On Business® survey is sent out to Manufacturing Business Survey Committee respondents the first part of each month. Respondents are asked to ONLY report on information for the current month. ISM® receives survey responses throughout most of any given month, with the majority of respondents generally waiting until late in the month to submit responses in order to give the most accurate picture of current business activity. ISM® then compiles the report for release on the first business day of the following month. The industries reporting growth, as indicated in the Manufacturing ISM® Report On Business® monthly report, are listed in the order of most growth to least growth. For the industries reporting contraction or decreases, those are listed in the order of the highest level of contraction/decrease to the least level of contraction/decrease. Responses to Buying Policy reflect the percent reporting the current month's lead time, the approximate weighted number of days ahead for which commitments are made for Capital Expenditures; Production Materials; and Maintenance, Repair and Operating (MRO) Supplies, expressed as hand-to-mouth (five days), 30 days, 60 days, 90 days, six months (180 days), a year or more (360 days), and the weighted average number of days. These responses are raw data, never revised, and not seasonally adjusted since there is no significant seasonal pattern. ISM ROB Content Except as explicitly and expressly permitted by ISM, you are strictly prohibited from creating works or materials (including but not limited to tables, charts, datastreams, timeseries variables, fonts, icons, link buttons, wallpaper, desktop themes, on-line postcards, montages, mash-ups and similar videos, greeting cards, and unlicensed merchandise) that derive from or are based on the ISM ROB Content. 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