Monday, July 02, 2018

ISM Manufacturing index increased to 60.2 in June, Concern about Tariffs

by Bill McBride on 7/02/2018 10:05:00 AM

The ISM manufacturing index indicated expansion in June. The PMI was at 60.2% in June, up from 58.7% in May. The employment index was at 56.0%, down from 56.3% last month, and the new orders index was at 63.5%, down from 63.7%.

From the Institute for Supply Management: June 2018 Manufacturing ISM® Report On Business®

Economic activity in the manufacturing sector expanded in June, and the overall economy grew for the 110th consecutive month, say the nation’s supply executives in the latest Manufacturing ISM® Report On Business®.

The report was issued today by Timothy R. Fiore, CPSM, C.P.M., Chair of the Institute for Supply Management® (ISM®) Manufacturing Business Survey Committee: “The June PMI® registered 60.2 percent, an increase of 1.5 percentage points from the May reading of 58.7 percent. The New Orders Index registered 63.5 percent, a decrease of 0.2 percentage point from the May reading of 63.7 percent. The Production Index registered 62.3 percent, a 0.8 percentage point increase compared to the May reading of 61.5 percent. The Employment Index registered 56 percent, a decrease of 0.3 percentage point from the May reading of 56.3 percent. The Supplier Deliveries Index registered 68.2 percent, a 6.2 percentage point increase from the May reading of 62 percent. The Inventories Index registered 50.8 percent, an increase of 0.6 percentage point from the May reading of 50.2 percent. The Prices Index registered 76.8 percent in June, a 2.7 percentage point decrease from the May reading of 79.5 percent, indicating higher raw materials prices for the 28th consecutive month.

Respondents are overwhelmingly concerned about how tariff related activity is and will continue to affect their business
emphasis added
ISM PMIClick on graph for larger image.

Here is a long term graph of the ISM manufacturing index.

This was above expectations of 58.3%, and suggests manufacturing expanded at a faster pace in June than in May.

A solid report.