U.S. manufacturing remains sluggish in July, but overall economy expands

The Institute for Supply Management says U.S. manufacturing contracted slightly for the second consecutive month in July, registering 49.8 percent.

The Institute for Supply Management (ISM, Tempe, Arizona) reported on Aug. 1 that economic activity in the U.S. manufacturing sector contracted in July for the second time since July 2009; however, the overall economy grew for the 38th consecutive month. ISM's index registerd 49.8 percent. A reading of more than 50 percent indicates that the manufacturing economy is generally expanding; less than 50 percent indicates that it is generally contracting.

The report was issued by Bradley J. Holcomb, CPSM, CPSD, chair of the Institute for Supply Management Manufacturing Business Survey Committee. “The PMI registered 49.8 percent, an increase of 0.1 percentage point from June’s reading of 49.7 percent, indicating contraction in the manufacturing sector for the second consecutive month, following 34 consecutive months of expansion. The New Orders Index registered 48 percent, an increase of 0.2 percentage point from June and indicating contraction in new orders for the second consecutive month, but at a slightly slower rate. Both the Production Index and the Employment Index remained in growth territory, registering 51.3 percent and 52 percent, respectively. The Prices Index for raw materials registered 39.5 percent, an increase of 2.5 percentage points from the June reading of 37 percent, indicating lower prices on average for the third consecutive month. A growing number of comments from the panel this month reflect a slowdown in their businesses and general concern over increasing economic uncertainty.”

Last 12 months:

  • July 2012: 49.8
  • June 2012: 49.7
  • May 2012: 53.5
  • April 2012: 54.8
  • March 2012: 53.4
  • February 2012: 52.4
  • January 2012: 54.1
  • December 2011: 53.9
  • November 2011: 52.7
  • October 2011: 50.8
  • September 2011: 51.6
  • August 2011: 50.6