ISA Economic Indicator Shows July Slowdown

The Industrial Supply Association remains optimistic after July's readings showed a modest dip in the Distributors Index and a considerable drop in the Manufacturers Index.

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The August ISA Economic Indicator Report (EIR) from the Industrial Supply Association indicated that growth slowed for Distributors and Manufacturers during the month of July.

The ISA Distributor Index declined modestly from 65.7 in June to 62.2 in July, while the Manufacturer Index decreased considerably from 62.7 to 53.1.

"This was expected and predicted in last month's report, where distributors were optimistic and manufactures weren't," ISA said in its report. "Expectations for growth in August are optimistic for both segments."

Year-over-year, July's Distributor Index is down 0.4 points from 2014, while the Manufacturer Index is down 8.7 points.

(Source: ISA)

"While this month’s report shows that the economy is still expanding, it’s doing so at a slower pace," said Bryon Shafer, general manager of ASG Industrial and chair of ISA’s Strategic Information Committee. "The good news is that the Anticipated Business Conditions Index and the Anticipated New Orders Index both increased during the month, indicating that distributors and manufacturers are optimistic about the future."

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For each index, a reading above 50 percent indicates expansion, while a reading below 50 percent indicates contraction. The Indexes have been above 50 percent since December 2012.

Commenting on the month of July, ISA member industrial distributor's comments included the following (all anonymous):

"Feels like were almost at recession levels again."

"Market is growing a little, but can vary up one month and marginally down in the next month."

"Directly related to petroleum business-drilling -exploration. Things are very slow."

"July is never a great month for us. We have some business that is keeping us strong while energy, coal and mining is off significantly. It pays to be diversified."

(Source: ISA)

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