ISM June manufacturing report shows nice rebound from May

{lm_summary}

Latest News

State of Logistics 2016: Pursue mutual benefit
Climate Change Bringing More Rain Will Complicate Supply Chains
3PL sector sees annual revenue gains, reports Armstrong
International Air Transport Association Drives New Partnership With Global Forwarders
Overnite Transportation Founder J. Harwood Cochrane passes away at 103
More News

Latest Resource

Improving Packaging: The Cost of Shipping Air is Going Up
Retailers and manufacturers that insist on using inefficient and sloppy packaging methods—oversized boxes, inefficient packaging, poorly constructed palletized contents—are paying for their mistakes in sharply higher freight rates.
All Resources
By ·

Coming off somewhat of a “down” month in May, the June Manufacturing Report on Business from the Institute for Supply Management (ISM) showed that manufacturing is indeed still on solid ground.

The ISM reported that the index it uses to measure the manufacturing sector—known as the PMI—was 55.3 in June, up 1.8 percent from May’s 53.5. May marked the first month in 2011 that the PMI did not exceed 60. But even though the last two months were below 60, manufacturing experts said it was likely the PMI would head down a little bit.

Any PMI reading 50 or higher represents economic growth. And despite the sequential decline, June is the 25th consecutive month economic growth has occurred in the overall economy and the 23d consecutive month economic activity in the manufacturing sector has occurred, according to the report.

New orders were up 0.6 percent at 51.6, and production saw a 0.5 percent gain at 54.5. Employment also was up at 59.9 for a 1.7 percent increase.

“The index at 55.3 is positive and welcome news,” said Bradley J. Holcomb, CPSM, CPSD, chair of the ISM Manufacturing Business Survey Committee, in an interview. “A number of people were predicting for a lower reading than that. This recovery in manufacturing has been sustained for 23 months now through thick and thin, and this is another indication of that positive trend.”

The strong employment reading in this report, said Holcomb, represents a very strong optimism and shows that manufacturers are willing to take on more staff and serves as a strong leading indicator of good things to come over the next two months.

Inventories also had a strong month with a 5.4 percent gain to come in at 54.1, while customer inventories were up 7.5 percent at 47.0.

This increase continues and “up and down ride” over the last five months or so, noted Holcomb, and remains in an acceptable range.

“The managing inventories—raw materials, commodities, and inputs to manufacturing—is occurring at an acceptable range and shows good inventory management discipline,” explained Holcomb. “I am not particularly concerned about inventory readings being up over 50 at this point, because of the fluctuation.”

Prices were down 8.5 percent in June, following a 9 percent decline in May for a cumulative 17.5 percent dip over the last two months.

Holcomb labeled this development as very good news.

“The drop-off in fuel has a lot to do with it,” he said. “Gas, oil and diesel helps directly with transportation but it also impacts other things. This is clearly welcome, but there is continuing concern about inflation and prices, with people looking for more relief going forward.”

Manufacturing: ISM reports sector cooling off after rapid growth through first 4 months of 2011
After four straight months of rapid growth in the manufacturing sector to kick off 2011, the Institute for Supply Management (ISM) reported today that overall activity was down somewhat in May.

Manufacturing strength continues in April, says ISM
While consumer spending is dragging somewhat due to increasing fuel prices, manufacturing growth shows no sign of stalling out based on data released today by the Institute for Supply Management (ISM).


About the Author

Jeff Berman, Group News Editor
Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. Contact Jeff Berman

Subscribe to Logistics Management Magazine!

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.
Start your FREE subscription today!

Latest Whitepaper
Improving Packaging: The Cost of Shipping Air is Going Up
Retailers and manufacturers that insist on using inefficient and sloppy packaging methods—oversized boxes, inefficient packaging, poorly constructed palletized contents—are paying for their mistakes in sharply higher freight rates. Pitt Ohio White Paper, Logistics White Paper, Dimensional Packaging
Download Today!
From the July 2016 Issue
While it’s currently a shippers market, the authors of this year’s report contend that we’ve entered a “period of transition” that will usher in a realignment of capacity, lower inventories, economic growth and “moderately higher” rates. It’s time to tighten the ties that bind.
2016 State of Logistics: Third-party logistics
2016 State of Logistics: Ocean freight
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Getting the most out of your 3PL relationship
Join Evan Armstrong, president of Armstrong & Associates, as he explains how creating a balanced portfolio of "Top 50" global and domestic partners can maximize efficiency and mitigate risk.
Register Today!
EDITORS' PICKS
Regional ports concentrate on growth and connectivity
With the Panama Canal expansion complete, ocean cargo gateways in the Caribbean are investing to...
Digital Reality Check
Just how close are we to the ideal digital supply network? Not as close as we might like to think....

Top 25 ports: West Coast continues to dominate
The Panama Canal expansion is set for late June and may soon be attracting more inbound vessel calls...
Port of Oakland launches smart phone apps for harbor truckers
Innovation uses Bluetooth, GPS to measure how long drivers wait for cargo