ISM: "June Manufacturing ISM Report On Business® PMI at 56.2%"
dismal.com
>>>ISM Index (formerly NAPM) (United States) @ a Glance
The ISM index rose slightly in June to 56.2%, on par with expectations.
This is the fifth consecutive month that the manufacturing industry has expanded after the previous period of contraction, which lasted eighteen months.
The recession in the manufacturing industry has officially ended, and in a positive sign, it now appears that the expansion is broadening.<<<
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reportonbusiness.ism.ws <---details
>>>JULY 1, 2002
June Manufacturing ISM Report On Business® PMI at 56.2%
New Orders, Production Growing
Supplier Deliveries Slowing
Employment, Inventories Decline
Exports, Imports Growing
(Tempe, Arizona) — Economic activity in the manufacturing sector grew for the fifth consecutive month in June. The overall economy grew for the eighth consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business®.
The report was issued today by Norbert J. Ore, C.P.M., chair of the Institute for Supply Management™ Manufacturing Business Survey Committee and group director, strategic sourcing and procurement, Georgia-Pacific Corporation. "June was a good month for manufacturing. The PMI strengthened as 15 industries saw improvement in production. June's Production Index of 61.4 percent is the highest recorded since June 1999."
ISM's Backlog of Orders Index indicates that order backlogs grew for the fifth consecutive month. ISM's Supplier Deliveries Index reflects slower deliveries for the sixth consecutive month. Manufacturing employment continued to decline in June as the index remained below the breakeven point (an index of 50 percent) for the 21st consecutive month.
ISM's Prices Index is above 50 percent as manufacturers experienced higher prices for the fourth consecutive month. New Export Orders grew in June for the sixth consecutive month. June's Imports Index accelerated, while still registering growth for the seventh consecutive month.
Comments from purchasing and supply executives indicate that the manufacturing recovery is gaining momentum, but business is not as strong when looking at year-over-year performance. The weakening U.S. dollar has had an immediate impact on export orders as survey respondents note activity in offshore markets that had been closed due to currency valuations. The recent steel tariffs drove many comments as respondents indicated that the tariffs are moving prices higher and extending deliveries in the industry.
ISM's PMI is 56.2 percent in June, an increase 0.5 percentage point when compared to 55.7 percent reported in May. ISM's New Orders Index declined from 63.1 percent in May to 60.8 percent in June. ISM's Production Index rose 2.9 percentage points from 58.5 percent in May to 61.4 percent in June. The ISM Employment Index is at 49.7 percent for June, an increase of 2.4 percentage points when compared to the 47.3 percent reported in May.
ISM's Supplier Deliveries Index registered 55.2 percent, compared to 53.9 percent in May. ISM's Inventories Index declined to 43.7 percent. ISM's Customer Inventories Index for June is at 44.5 percent, a significant increase when compared to May's 39 percent. ISM's Prices Index in June is 65.5 percent, an increase of 2.5 percentage points from May's 63 percent. ISM's Backlog of Orders Index declined 3 percentage points from 56.5 percent in May to 53.5 percent in June.
ISM's New Export Orders Index registered 54.5 percent, up 1.2 percentage points from May's 53.3 percent. The rate of growth in imports slowed somewhat, as the Imports Index rose from 53.6 percent in May to 55.1 percent in June.
"The growth in manufacturing activity accelerated slightly during June," added Ore. "Steel price increases are drawing a lot of attention from supply managers, and while energy prices have moderated, they are still a concern. Transportation & Equipment; Furniture; and Textiles report a strong upswing in hiring during June. Overall, June was a good month for U.S. manufacturing."
Of the 20 industries in the manufacturing sector, 15 industries reported growth: Textiles; Glass, Stone & Aggregate; Furniture; Paper; Transportation & Equipment; Printing & Publishing; Chemicals; Wood & Wood Products; Fabricated Metals; Food; Instruments & Photographic Equipment; Rubber & Plastic Products; Industrial & Commercial Equipment & Computers; Primary Metals; and Miscellaneous (a preponderance of jewelry, toys, sporting goods, musical instruments).
"Steel; Steel, Coated; and Steel, Flat Rolled are the only commodities reported in short supply. Commodities reported up in price are: Aluminum, Caustic Soda; Copper; Corrugated Containers; Energy; Ethylene; Fuels; Molybdenum; Nickel, Polyethylene, Polyethylene, High Density; Polypropylene; Pulp; Resins, Steel; Steel, Coated; Steel, Cold Rolled, Steel, Flat Rolled; Steel, Pipe & Tubing; and Steel, Stampings. The only commodities reported down in price are: Corrugated Containers and Natural Gas," Ore stated.<<<
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quote.bloomberg.com
>>>07/01 10:20
U.S. June ISM Manufacturing Index Rises to 56.2 (Update1)
By Siobhan Hughes
Washington, July 1 (Bloomberg) -- U.S. manufacturing expanded in June at the fastest pace in more than two years as production grew and inventories were reduced, giving a boost to the economy's recovery.
The Institute for Supply Management's factory index rose to 56.2 last month, the highest since February 2000, from 55.7 in May. A reading above 50 signals expansion, and the index has stayed above that level for five straight months.
``Manufacturing is heating up a bit more rapidly, and that says the recovery is still on track and beginning to gather steam,'' said Scott Brown, an economist at Raymond James & Associates in St. Petersburg, Florida, before the report.
Rising orders for everything from DuPont Co. chemicals to General Electric Co. plastics and Emerson Electric Co. power systems are leading manufacturing out of its longest slump since 1981-1982. The Tempe, Arizona, group's index showed declines from 18 months beginning in August 2000.
Economists had expected a reading of 55.5, according to the median of 44 forecasts in a Bloomberg News survey. The Institute's survey is based on data from more than 400 companies in 20 industries, including clothing, furniture and plastics. Manufacturing accounts for about one-sixth of the U.S. economy.
New Orders, Production
A measure of new orders, which accounts for about a third of the main factory index, fell to 60.8 in June from 63.1 in May. The production index, a gauge of current output, rose to 61.4, the highest since June 1999, from 58.5 the month before. Fifteen out of 20 industries reported increased business.
``We have certainly seen strengthening in our order activity,'' said Robert Bauer, president of Emerson Electric Co.'s Emerson Network Power systems North America unit, in an interview last month. ``We are building backlog in all of our businesses.''
Orders at General Electric, the world's largest company by market capitalization, are rising ``for the first time in several quarters'' at divisions such as plastics and electrical equipment, Chief Financial Officer Keith Sherin said last week.
And at DuPont Co., the second-largest U.S. chemical maker, said last week that its second-quarter profit would be higher than expected. A record pace of home sales so far this year is lifting demand for chemicals used in building products and carpet fibers just as the chemical maker is trying to keep up with sales to automakers, which are boosting production and need more paints and plastics.
Inventories Shrink
A measure of inventories fell to 43.7 from 45.6, evidence that manufacturers were still drawing down their stockpiles. And a gauge of employment rose to 49.7 from 47.3, a sign that the recovery may be starting to translate into increased hiring. The last time the employment index was higher was in September 2000.
General Motors Corp. is asking workers to put in overtime and relying on productivity gains instead of adding workers, part of an effort to boost profits in the wake of the recession that started in March 2001.
A measure of order backlogs fell to 53.5 from 56.5. The new export orders index rose to 54.5 from 53.3, the sixth month above 50 and a signal that demand from foreign countries is starting to improve. It's now the highest since March 2000.
Companies may be gaining some power to improve profit margins. The prices-paid index rose to 65.5 in June from 63 the month before. That's the highest since May 2000. Still, the reading partly may be related to steel tariffs imposed by President George w. Bush in March. The tariffs, of as much as 30 percent, give U.S. steel makers greater ability to raise prices. <<< |
