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ISM: US manufacturing activity slows in July

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ISM: US manufacturing activity slows in July

Decrease in activity disappoints

According to the widely watched Manufacturing ISM Report on Business, economic activity in the manufacturing sector expanded in June for the 31st consecutive month. However, the pace of growth slowed during the month.

The June PMI registered 52.7%, a decrease of 0.8 percentage point over the June reading of 53.5%.  (Results over 50% indicate expansion.)

Analysts had expected the PMI to remain at 53.5%.

The New Orders Index rose to 56.5%, an increase of 0.5 percentage point from the reading of 56.0% in June, while the Production Index increased to 56.0%, 2 percentage points above the June reading of 54.0%.

Surprisingly, the Employment Index fell, coming in at 52.7%, 2.8 percentage points below the June reading of 55.0%.

Inventories of raw materials registered 49.5%, a decrease of 3.5 percentage points from the June reading of 53.0%, while the Prices Index fell 5.5 percentage points to 44.0%, indicating lower raw materials prices for the ninth consecutive month.

Bradley J. Holcomb, CPSM, CPSD, chair of the Institute for Supply Management® (ISM®) Manufacturing Business Survey Committee, noted that “Comments from the panel reflect a combination of optimism mixed with uncertainties about international markets and the impacts of the continuing decline in oil prices."

 

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