July Manufacturing Shows Glimmer of Recovery
Published: 04 August 2009
by Administrator
TEMPE, AZ – New orders for manufactured products jumped in July, carrying production along for the ride, according to the latest data from the Institute for Supply Management.
The PMI index in July rose 1.1 points to 48.9%, ISM reported today. New Orders were up 6.1 points to 55.3%. Production reached 57.9%, up 5.4 points. The trends suggest the full recovery will be complete by the third quarter, an ISM spokesman said.
During the month, inventories rose 2.7 points to 33.5%, as manufacturers began to backfill depleted stocks. Customer Inventories dipped 1 point to 42.5%, and Order Backlogs increased 2.5 points to 50%.
A reading above 50% indicates the manufacturing economy is generally expanding.
Economic activity in the manufacturing sector failed to grow in July for the 18th consecutive month, while the overall economy grew for the third consecutive month, according to ISM.
"The decline in manufacturing was slower in July when compared to June, as the more leading components of the PMI – the New Orders and Production Indexes – rose significantly above 50%, thus setting an expectation for future growth in the sector,” said ISM spokesperson Norbert J. Ore. The Employment and Inventories indexes are still contracting, but the rate is slowing and they are moving in the right direction. It is also worth noting that the New Export Orders index shows growth following nine consecutive months of decline, suggesting that the global economy is recovering. Overall, it would be difficult to convince many manufacturers that we are on the brink of recovery, but the data suggest that we will see growth in the third quarter if the trends continue.”
