The manufacturing economy cooled slightly in July while continuing to operate at a strong rate, the Institute for Supply Management said today.
The Tempe, Ariz.-based group’s manufacturing index, known as the PMI, was 59.5 percent last month.
An index reading above 50 percent indicates economic expansion in manufacturing. The July index snapped a streak of five months above 60 percent. The PMI has shown manufacturing expansion for 14 straight months.
“This is a really strong growth profile,” Timothy R. Fiore, chair of ISM’s Manufacturing Business Survey Committee, said on a conference call. “We’re remaining at a really high level.”
Fiore said the PMI’s current stretch is the strongest in the past 20 years.
The manufacturing index is based on a survey of executives in 18 industries. ISM said 17 industries reported economic expansion last month. Only textiles reported economic contraction, ISM said.
The index is viewed as a leading economic indicator and a barometer of where manufacturing is heading.
The PMI has averaged 59.5 percent for the past 12 months. During that period, the lowest index level was 55.6 percent in August 2020 while the highest was 64.7 percent in March.
The institute said data from its survey indicated that price increases for manufacturers are easing. “Price growth seems to have reached a peak in June,” Fiore said.
ISM’s New Orders Index was 64.9 percent in July, down from 66 percent the month before. The group said 15 industries reported an increase in new orders. “We’re really strong on the demand end,” Fiore said.
The group’s Production Index registered at 58.4 percent in July, down from 60.8 percent in June. Sixteen industries reported a gain in output.
The institute’s Employment Index rose to 52.9 percent last month, up from 49.9 percent the month before. ISM said 11 industries reported job gains while four reported job cuts.