Economic activity in the manufacturing sector grew in July as the overall economy enjoyed a third consecutive month of growth, according to the Manufacturing ISM Report On Business from the Institute for Supply Management.
Timothy Fiore, ISM’s Manufacturing Business Survey Committee chair, noted that in July, the Purchasing Manager’s Index registered 54.2%, up from 52.6% in June and, a figure that indicates expansion in the overall economy. The three months of expansion continuing through July followed a contraction in April that ended 131 consecutive months of economic growth.
“In July, manufacturing continued its recovery after the disruption caused by the coronavirus pandemic,” Fiore stated. “Demand expanded, with the New Orders Index growing at a strong level, supported by the New Export Orders Index re-entering expansion. Customers’ Inventories Index remaining at a level considered a positive for future production, and Backlog of Orders Index returning to expansion for the first time in five months. Consumption, measured by the Production and Employment indexes, contributed positively to the PMI calculation, with industries continuing to expand output after May’s return-to-work actions. Inputs— expressed as supplier deliveries, inventories and imports— weakened for the third straight month due to supplier delivery issues abating and import levels re-entering expansion. Inventory levels contracted due to strong production output, supplier delivery difficulties and inventory minimization. Inputs contributed negatively to the PMI calculation but were more than offset by the demand and consumption improvement, as was the case in June. Prices remained in expansion, supporting a positive outlook.”