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The attached file contains this articles commentary as well as tables and charts of the data.

ISM Manufacturing: Lower, But Not As Much as Regional Surveys Suggested

August 2, 2017
Bottom Line: ISM's Survey indicated manufacturing activity expanded in July slightly less than expected but still better than regional Fed survey had suggested. The headline index was in-line with its 3-month average, indicating sentiment among purchasing managers has stabilized at moderately strong levels. The differential between new orders and inventory levels declined, suggesting this moderation should last a few months.

Employment in the manufacturing sector grew and was slightly above the average survey level for the last twelve months as anecdotal evidence continued to suggest tight labor markets in many industries.

Prices paid, increased from 55.0% to 62.0% this month indicating an increase in the price of raw materials. Overall the report suggests modest manufacturing activity.

The ISM Manufacturing Index FELL by 1.5 points in July to 56.3%, compared with market expectations for a smaller decline to a 56.4%. This indicates that manufacturing activity expanded modestly during the month.

New Orders declined modestly from 63.5% to 60.4%. Meanwhile, Export Orders declined sharply.

Production declined modestly from 62.4% to 60.6%. Consequently, Order Backlogs grew sharply. Inventories grew modestly from 49.0% to 50.0%. They are modestly above the average survey level for the last twelve months.

Employment declined modestly from 57.2% to 55.2%, suggesting there will be modest factory job creation in the upcoming payroll employment report. Prices grew moderately.

Quotes from Survey:
"Orders are strong, and quote activity is just as strong. Gearing up for [a] strong third quarter." (Chemical Products)

"In regard to sales, we have had our best year ever. Demand still exceeds supply in our category. Competitors are investing in capital expansion." (Food, Beverage & Tobacco Products)

"We are having huge sales numbers, and backlog is growing." (Computer & Electronic Products)

"Strong demand for our products has our manufacturing plants focusing on uptime and production." (Nonmetallic Mineral Products)

"Export orders are continuing to strengthen. The understatement is how stable domestic business is as well." (Wood Products)

"Business is very steady, but everyone is waiting till the last minute to place their orders." (Machinery)

"Six profitable months in a row. First time since 2007." (Fabricated Metal Products)

"Starting to see better order entry and planning on turnaround for 2018." (Electrical Equipment, Appliances & Components)

"Business has picked up the last few months, but next month is a bit slower — could be cyclical." (Plastics & Rubber Products)

"Labor shortages are pretty universal, leading to longer lead times through the supply chain. Pricing pressure as community clamors for premium capacity." (Transportation Equipment)