The Institute for Supply Management reports that U.S. manufacturing activity grew in July for the 12th straight month, and the overall economy grew for the 15th consecutive month. However, the monthly survey of purchasing managers revealed that the rate of manufacturing growth slowed for the third month in a row, thanks to declines in the rate of growth for new orders and production levels.
The ISM’s manufacturing index for July was 55.5, above the 50.0 mark that indicates growth, though new orders for manufactured goods fell to a one-year low. The report is based on data compiled from purchasing and supply executives nationwide, and the index reflects changes from month to month in a series of categories: new orders, backlog of orders, new export orders, imports, production, supplier deliveries, inventories, customers' inventories, employment and prices.
In the July survey, new orders, production and employment grew on average across the 18 industries ISM surveys. Supplier deliveries slowed from June, and inventory levels grew.
ISM Manufacturing Business Survey Committee chairman Norbert J. Ore, explained: "Manufacturing continued to grow during July, but at a slightly slower rate than in June. Employment, supplier deliveries, and inventories improved during the month and reduced the impact of a month-over-month deceleration in new orders and production.”
Ore said July indicators show that manufacturing demand remains strong in 10 of the 18 industries it tracks — including appliances and components; transportation equipment; primary metals; computer and electronic products; fabricated metal products; and chemical products; machinery was among four industries reporting contraction in July — but manufacturers’ raw material and component prices rose slightly.