US Manufacturing PMI Rises To 50.9 In June As New Orders, Production and Inventories Grow Yet Employment Contracts.
The Institute for Supply Management (ISM) says that business conditions are improving but the growth pace is slow. The group's Purchasing Managers Index (PMI) increased by 1.9 percent in June to 50.9 percent, registering higher that May's reading of 49 percent. That rise above the 50-mark indicates that the manufacturing sector expanded for the fifth time in the first six months of 2013, while the overall economy grew for the 49th consecutive month.
June's 50.9 percent level is higher than what analysts were expecting. The consensus among analysts polled by Reuters and also by Briefing.com expected, on average, that June's ISM would be 50.5 following May's level of 49. Above 50.0 indicates industry expansion, below indicates contraction.
The positive activity was bolstered by new orders, which increased by 3.1 percentage points to 51.9 percent, and also by the Production Index which increased by 4.8 points to 53.4 percent. However, the 48.7 employment reading, down 1.4 percent since May's 50.1 percent reading, matched a level not reached since the recession.
"Manufacturing employment contracted for the first time since September 2009, when the index registered 47.8 percent," Bradley J. Holcomb, ISM chair, said.
The Prices Index increased by three points to 52.5 percent, indicating that overall raw materials prices increased from May."
Purchasing managers are considered to have current and relevant insight into a company's view of the economy. The report, based on a survey of about 400 purchasing managers in the manufacturing industry, measures business conditions such as employment, production, new orders, prices, supplier deliveries, and inventories. It is a leading indicator of economic health, as businesses react quickly to market conditions.
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|Publication:||International Business Times - US ed.|
|Date:||Jul 1, 2013|
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