The U.S. manufacturing economy slowed in June, with new orders going into negative territory, the Institute for Supply Management said July 1.
The Tempe, Ariz.-based group’s manufacturing index, known as the PMI, slipped to 53 percent last month from 56.1 percent in May.
An index reading above 50 percent indicates economic expansion. Below that mark indicates economic contraction.
ISM said new orders contracted in June. That’s important because new orders have an impact on future months.
The PMI in June reached its lowest level since June 2020, when the U.S. economy felt the impact of the worst months of the COVID-19 pandemic. The index was at 52.4 percent in June 2020. The PMI has averaged 58.2 percent the past 12 months.
“The U.S. manufacturing sector continues to be powered — though less so in June — by demand while held back by supply chain constraints,” Timothy R. Fiore, chair of ISM’s Manufacturing Business Survey Committee, said in a statement.
The index is based on a survey of executives in 18 industries. Fifteen industries reported economic expansion, including primary metals, transportation equipment, fabricated metal products and miscellaneous manufacturing.
ISM’s New Orders Index fell to 49.2 percent in June, down from 55.1 percent in May. Eight industries reported a gain in new orders.
The group’s Production Index rose to 54.9 percent last month, up from 54.2 percent in May. Ten industries reported an increase in output.
The institute’s Employment Index slipped to 47.3 percent for June, down from 49.6 percent the month before. Nine industries reported an increase in hiring.
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