Manufacturing PMI Hits 2018 Midpoint At 4-Month High

After falling to a nine-month low in April, the U.S. manufacturing purchasing managers index has climbed nearly three points — indicating market acceleration heading into the second half of 2018.

Id 35128 Arrow For Growth Q

TEMPE, AZ — 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 Monday 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.

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.

MANUFACTURING AT A GLANCE — JUNE 2018

Index Series Index Jun Series Index May Percentage Point Change Direction Rate of Change Trend* (Months)
PMI® 60.2 58.7 +1.5 Growing Faster 22
New Orders 63.5 63.7 -0.2 Growing Slower 30
Production 62.3 61.5 +0.8 Growing Faster 22
Employment 56.0 56.3 -0.3 Growing Slower 21
Supplier Deliveries 68.2 62.0 +6.2 Slowing Faster 21
Inventories 50.8 50.2 +0.6 Growing Faster 6
Customers’ Inventories 39.7 39.6 +0.1 Too Low Slower 21
Prices 76.8 79.5 -2.7 Increasing Slower 28
Backlog of Orders 60.1 63.5 -3.4 Growing Slower 17
New Export Orders 56.3 55.6 +0.7 Growing Faster 28
Imports 59.0 54.1 +4.9 Growing Faster 17
OVERALL ECONOMY Growing Faster 110
Manufacturing Sector Growing Faster 22

Manufacturing ISM® Report On Business® data is seasonally adjusted for the New Orders, Production, Employment and Supplier Deliveries Indexes.
*Number of months moving in current direction.

THE LAST 12 MONTHS

Month PMI®
Jun 2018 60.2
May 2018 58.7
Apr 2018 57.3
Mar 2018 59.3
Feb 2018 60.8
Jan 2018 59.1
Dec 2017 59.3
Nov 2017 58.2
Oct 2017 58.5
Sept 2017 60.2
Aug 2017 59.3
Jul 2017 56.5
12-month average - 59.0

source: tradingeconomics.com
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