ISM: Manufacturing Back On The Rise After Sharp Downturn

Manufacturing Back On The Rise After Downturn

The battered U.S. manufacturing sector continued its post-pandemic rebound in June, hitting its highest levels in more than a year in a bright spot amid growing unease over resurging coronavirus case numbers, a new survey finds.

The widely watched PMI index of factory activity rose 1.6 percent in July over June, hitting 54.2 percent, according to the Institute for Supply Management (ISM), which puts out the monthly survey.

That was the highest reading since March 2019, signaling that the nation’s manufacturing sector is expanding again after a sharp, coronavirus-driven contraction in April.

“In July, manufacturing continued its recovery after the disruption caused by the coronavirus (COVID-19) pandemic. Panel sentiment was generally optimistic (two positive comments for every one cautious comment), continuing a trend from June,” said Timothy R. Fiore, chair of the ISM’s Manufacturing Business Survey Committee.

The new orders index showed some of the most impressive growth, jumping 5.1 percent to 61.5 percent, while the production index shot up 4.8 percent to 62.1 percent. Anything above 50 percent represents an expanding market, while readings below 50 percent mean contraction.

The ISM’s index that tracks backlogs of orders surged into positive territory, rising 6.5 percent to 51.8 percent, up from 45.3 percent in June.

The employment index also improved, though it remained on the contraction side of the ledger, rising to 44.3 percent in July, a 2.2 percent increase over June.

Thirteen out of 18 industries tracked by the ISM reported growth in July, including wood products, furniture, plastics, rubber and chemical sectors, as well as the food, beverage and tobacco product industries.

Manufacturers of transportation equipment, machinery and fabricated metal products all reported continued contraction in July, according to the ISM.

“Among the six biggest industry sectors, food, beverage and tobacco products remains the best-performing industry sector, with chemical products, computer and electronic products and petroleum and coal products growing respectably, Fiore said.