U.S. ISM factory index slows in August -
Wednesday, September 1, 2004 3:09:44 PM
WASHINGTON (AFX) -- Factory activity in the United States decelerated in August, the Institute for Supply Management reported Wednesday. The ISM index fell to 59.0 percent in August from 62.0 percent in July. Last month's decline in the closely followed index came in slightly below expectations. Economists had been looking for the ISM survey to fall to 59.8 percent, according to a survey by CBS MarketWatch. But Josh Shapiro, chief economist at MFR Inc., said the decline wasn't as bad as some economists had feared after a survey index of purchasing managers in the Chicago area fell sharply on Tuesday. Before August, the ISM had been above 60 percent for nine straight months, marking the longest period of growth above this level since 1972
Norbert Ore, head of the ISM's research committee, said he thought the ISM index had peaked and won't return to an above-60 reading in the near future
"In terms of rate of growth, we've probably seen the peak for quite some time. But that doesn't mean that the manufacturing sector is in any type of major downturn at this point," Ore said
Within the ISM data, new orders fell to 61.2 percent in August from 64.7 percent in July. The employment index fell to 55.7 percent in August from 57.3 percent. Production slipped to 59.5 percent from 66.1 percent in July
"Overall, the sector is still quite positive as both new orders and production remain at high levels," Ore said
Prices paid rose to 81.5 percent from July's 77.0 percent
Inventories rose to 51.7 percent in August from 49.9 percent in July. This is the highest level since January 2000
"It is not backup of inventories. It is probably a very positive inventory build at this point, trying to maintain service levels, as opposed to a signal that we need to be concerned," Ore said
[A very positive inventory build - uh huh - mish]
Seventeen of 20 industries were growing in August, according to the ISM data
Separately, U.S. construction spending rose 0.4 percent in July, a little better than the market expected. |
