DO NOT CONFUSE THIS NATIONAL REPORT with the various regional purchasing reports released across the country. The national report’s information reflects the entire United States, while the regional reports contain primarily regional data from their local vicinities. Also, the information in the regional reports is not used in calculating the results of the national report. The information compiled in this report is for the month of July 2011.
TEMPE, Ariz. — (BUSINESS WIRE) — August 1, 2011 — Economic activity in the manufacturing sector expanded in July for the 24th consecutive month, and the overall economy grew for the 26th consecutive month, say the nation’s supply executives in the latest Manufacturing ISM Report On Business®.
The report was issued today by Bradley J. Holcomb, CPSM, CPSD, chair of the Institute for Supply Management™ Manufacturing Business Survey Committee. “The PMI registered 50.9 percent, a decrease of 4.4 percentage points, indicating expansion in the manufacturing sector for the 24th consecutive month, although at a slower rate of growth than in June. Production and employment also showed continued growth in July, but at slower rates than in June. The New Orders Index registered 49.2 percent, indicating contraction for the first time since June of 2009, when it registered 48.9 percent. The rate of increase in prices slowed for the third consecutive month, dropping 9 percentage points in July to 59 percent. In the last three months combined, the Prices Index has declined by 26.5 percentage points, dropping from 85.5 percent in April to 59 percent in July. Despite relief in pricing, however, several comments suggest a slowdown in domestic demand in the short term, while export orders continue to remain strong.”
PERFORMANCE BY INDUSTRY
Of the 18 manufacturing industries, 10 are reporting growth in July, in the following order: Paper Products; Furniture & Related Products; Computer & Electronic Products; Transportation Equipment; Wood Products; Petroleum & Coal Products; Printing & Related Support Activities; Primary Metals; Fabricated Metal Products; and Nonmetallic Mineral Products. The seven industries reporting contraction in July — listed in order — are: Apparel, Leather & Allied Products; Plastics & Rubber Products; Textile Mills; Electrical Equipment, Appliances & Components; Food, Beverage & Tobacco Products; Machinery; and Chemical Products.
WHAT RESPONDENTS ARE SAYING …
- “Inflation pressures have finally slowed down.” (Chemical Products)
- “With products sold internationally, the business conditions we are currently experiencing are declining from abnormally [high] record-breaking levels. Business conditions are currently flattening to more normal volumes, while trending slightly downward.” (Machinery)
- “Market conditions — Europe weak, U.S. soft, Asia strong.” (Computer & Electronic Products)
- “Demand from automotive manufacturers continues to improve.” (Fabricated Metal Products)
- “Export sales very strong, while domestic sales are sluggish.” (Paper Products)
- “The looming debt ceiling has government agencies backing away from spending. Forecasting a slowdown in demand in the short term.” (Transportation Equipment)
- “Generally seeing a slowdown, which is typical this time of year. Hopeful that this is seasonal only.” (Plastics & Rubber Products)
- “Most industrial customers seem to be sustaining their business. Export orders continue to remain strong. Price pressures persist, especially with commodity materials.” (Chemical Products)
MANUFACTURING AT A GLANCE
|New Orders||49.2||51.6||-2.4||Contracting||From Growing||1|
|Customers’ Inventories||44.0||47.0||-3.0||Too Low||Faster||28|
|Backlog of Orders||45.0||49.0||-4.0||Contracting||Faster||2|