NEW YORK - The overall economy grew for the fifteenth straight time after seven months of contraction, while the manufacturing sector expanded for the twelfth time after eighteenth months of contraction, the Institute for Supply Management reported this morning.
According to the ISM’s monthly report on business, the ISM index dipped to 55.5 in July from 56.2 in June.
Economists polled by Thomson Reuters predicted the index would fall to 54.1.
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.
“The manufacturing sector continued to grow during June; however, the rate of growth as indicated by the PMI slowed when compared to May," said Norbert J. Ore, chair of the Institute of Supply Management's manufacturing business survey committee. “The lower reading for the PMI came from a slowing in the New Orders and Production Indexes. We are now 11 months into the manufacturing recovery, and given the robust nature of recent growth, it is not surprising that we would see a slower rate of growth at this time. The sector appears to be solidly entrenched in the recovery. Comments from the respondents remain generally positive, but expectations have been that the second half of the year will not be as strong in terms of the rate of growth, and June appears to validate that forecast.”
The closely watched prices paid index gained to 57.5 from 57.0. The employment index was at 58.7, up from 57.8 the prior month.
The production index decreased to 57.0 from 61.4, the new orders index fell to 53.5 from 58.5; the supplier deliveries index climbed to 58.3 from 57.3; the export orders index increased to 56.5 from 56.0; and the imports index fell to 52.5 from 56.5.
The inventories index climbed to 50.2 from 45.8; the customers’ inventories index grew to 39.0 from 38.0; and backlog of orders slipped to 54.5 from 57.0.
Respondents’ comments included:
"Business in July was strong, the best month since October 2008." (Fabricated Metal Products)
"Slow economy has killed sales for new equipment orders." (Machinery)
"Quoting activity and sales are slow, and backlog is dropping." (Computer & Electronic Products)
"Business continues to be sluggish and has fallen slightly as the economic ills continue." (Nonmetallic Mineral Products)
"Retailers are still unwilling to gamble on inventory." (Printing & Related Support Activities)
