ISM reported that the July Manufacturing PMI dropped to 52.8%, a decrease from June’s figure of 53%. While this is the lowest reading since June 2020, any number above 50% indicates expansion. The overall economic activity in the manufacturing sector grew for the 26th consecutive month.
Here is the breakdown of the July PMI:
- New Orders Index: 48%, a 1.2 percentage point decrease month-over-month
- Production Index: 53.5%, a 1.4 percentage point decrease month-over-month
- Prices Index: 60%, an 18.5 percentage point decrease month-over-month
- Backlog of Orders Index: 51.3%, a 1.9 percentage point decrease month-over-month
- Employment Index: 49.9%, a 2.6 percentage point increase month-over-month
- Supplier Deliveries Index: 55.2%, a 2.1 percentage point decrease month-over-month
- Inventories Index: 57.3%, a 1.3 percentage point increase month-over-month
- New Export Orders Index: 52.6%, a 1.9 percentage point increase month-over-month
- Imports Index: 54.4%, a 3.7 percentage point increase month-over-month
“The U.S. manufacturing sector continues expanding — though slightly less so in July — as new order rates continue to contract, supplier deliveries improve, and prices soften to acceptable levels. According to Business Survey Committee respondents’ comments, companies continue to hire at strong rates, with few indications of layoffs, hiring freezes or headcount reduction through attrition. Sentiment remained optimistic regarding demand, with six positive growth comments for every cautious comment,” Timothy R. Fiore, ISM chairman, said.
July saw growth in 11 manufacturing industries, including:
- Apparel, Leather & Allied Products
- Nonmetallic Mineral Products
- Petroleum & Coal Products
- Printing & Related Support Activities
- Computer & Electronic Products
- Transportation Equipment
- Textile Mills
- Primary Metals
- Plastics & Rubber Products
- Electrical Equipment, Appliances & Components
Wood Products, Furniture & Related Products, Paper Products, Miscellaneous Manufacturing, Fabricated Metal Products, Food, Beverage & Tobacco Products and Chemical Products all reported a decrease in July compared to June.