The overall economy grew for the 81st straight month, while the manufacturing sector was flat, the Institute for Supply Management reported Friday.
According to the ISM’s monthly report on business, the index dipped to 50.0 in July from 50.2 in June.
Economists polled by IFR Markets predicted the index would slip to 49.2.
An index reading below 50 signals a slowing economy, while a level above 50 suggests expansion. A reading of 50 shows the sector was unchanged in the month.
“In this month’s report, manufacturers indicate no change in overall business activity when comparing July to June,” said Norbert J. Ore, chairman of ISM’s manufacturing business survey committee. “This continues a trend biased toward relatively minor contraction established more than 12 months ago. Manufacturing has maintained a reasonable level of activity during a period in which other sectors of the economy have been in recession. While the PMI indicates little to no change has occurred during this period, it would be hard to convince manufacturers who are faced with higher costs and uncertain demand that there is little change taking place.”
The closely watched prices paid index dipped to 88.5 from 91.5. The employment index was at 51.9, up from 43.7 in June.
The production index increased to 52.9 from 51.5, the new orders index dipped to 45.0 from 49.6, the supplier deliveries index was flat at 55.1, the export orders index slid to 54.0 from 58.5, and the imports index rose to 46.5 from 46.0.
The inventories index decreased to 45.0 from 51.2, the customers’ inventories index fell to 47.0 from 55.0, and backlog of orders slumped to 43.0 from 47.5.