For the sixth consecutive month, manufacturing's major indicator has inched upward.
The Institute for Supply Management's PMI, the index measuring the overall health of the industry, climbed to nearly 45 percent in June. Although manufacturing is still in contraction mode – a reading below 50 generally indicates the industry is shrinking – the index has risen every month since bottoming out below 33 percent in December.
Manufacturing continues to contract at slower rate and the trends are encouraging as 7 of 18 sectors reported growth in June, according to Norbert Ore, chair of ISM's Manufacturing Business Survey Committee.
“Most encouraging is the gain in the Production Index, which is up 12.1 percentage points in the last two months to 52.5 percent,” Ore said. “Aggressive inventory reduction continues and indications are that the de-stocking cycle is at or near the end in most industries, as the Customers' Inventories Index remained below 50 percent for the third consecutive month. The Prices Index was unchanged from May, indicating that the supply/demand balance is improving.”
Other key indexes include:
*Employment. Although still in decline, the June index topped 40 percent, up more than six points from May.
*New Export Orders. At 49.5 percent, June marks the ninth consecutive month for contraction in new export orders. However, the index continues to creep upward and is close to the tipping point.
For more information about ISM visit http://www.ism.ws/
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