The overall economy grew for the eighty-seventh straight time, while the manufacturing sector contracted after five months of expansion, the Institute for Supply Management reported Thursday.
According to the ISM's monthly report on business, the ISM index decreased to 49.4 in August from 52.6 in July.
Economists polled by Thomson Reuters predicted the index would be 52.2.
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.
The prices paid index slid to 53.0 from 55.0. The employment index fell to 48.3 from 49.4.
The production index slumped to 49.6 from 55.4, the new orders index dropped to 49.1 from 56.9; the supplier deliveries index dipped to 50.9 from 51.8; the export orders index remained at 52.5; and the imports index fell to 47.0 from 52.0.
The inventories index decreased to 49.0 from 49.5; the customers' inventories index declined to 49.5 from 51.0; and backlog of orders fell to 45.5 from 48.0.
Respondents' comments included:
- "We have been getting lots of inquiries, but not a lot of sales order placements." (Chemical Products)
- "Business was flat this month overall." (Computer & Electronic Products)
- "Continued strong market demand for our products related to construction." (Nonmetallic Mineral Products)
- "Commercial construction continues to be strong, and therefore our business is very good." (Fabricated Metal Products)
- "New product distribution is increasing." (Food, Beverage & Tobacco Products)
- "This past month, sales increased over the trend from the first half of the year. There seems to be a general, albeit slight, loosening of capital purse strings." (Machinery)
- "Medical device is still strong." (Miscellaneous Manufacturing)
- "Business conditions are generally flat." (Transportation Equipment)
- "Hard to find production associates. Unemployment in the area is around 4 percent. Can't get enough employees [which] leads to lots of overtime." (Plastics & Rubber Products)
- "Oil prices continue to seek a 'footing'; rig count slowly increasing." (Petroleum & Coal Products)
