New Orders and Backlogs Contracting; Production and
Employment Contracting; Supplier Deliveries Faster; Raw Materials
Inventories Contracting; Customers' Inventories Too Low; Prices
Increasing; Exports and Imports Contracting
TEMPE,
Ariz., July 1, 2024 /PRNewswire/ -- Economic
activity in the manufacturing sector contracted in
June for the third consecutive month and the 19th
time in the last 20 months, 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 Manufacturing PMI® registered 48.5 percent in
June, down 0.2 percentage point from the 48.7 percent recorded in
May. The overall economy continued in expansion for the 50th month
after one month of contraction in April
2020. (A Manufacturing PMI® above 42.5 percent,
over a period of time, generally indicates an expansion of the
overall economy.) The New Orders Index remained in contraction
territory, registering 49.3 percent, 3.9 percentage points higher
than the 45.4 percent recorded in May. The June reading of the
Production Index (48.5 percent) is 1.7 percentage points lower than
May's figure of 50.2 percent. The Prices Index registered 52.1
percent, down 4.9 percentage points compared to the reading of 57
percent in May. The Backlog of Orders Index registered 41.7
percent, down 0.7 percentage point compared to the 42.4 percent
recorded in May. The Employment Index registered 49.3 percent, down
1.8 percentage points from May's figure of 51.1 percent.
"The Supplier Deliveries Index remained in 'faster' territory,
registering 49.8 percent, 0.9 percentage point higher than the 48.9
percent recorded in May. (Supplier Deliveries is the only
ISM® Report On Business® index that is
inversed; a reading of above 50 percent indicates slower
deliveries, which is typical as the economy improves and customer
demand increases.) The Inventories Index registered 45.4 percent,
down 2.5 percentage points compared to May's reading of 47.9
percent.
"The New Export Orders Index reading of 48.8 percent is 1.8
percentage points lower than the 50.6 percent registered in May.
The Imports Index dropped into contraction territory, registering
48.5 percent, 2.6 percentage point lower than the 51.1 percent
reported in May."
Fiore continues, "U.S. manufacturing activity continued in
contraction at the close of the second quarter. Demand was weak
again, output declined, and inputs stayed accommodative.
Demand slowing was reflected by the (1) New Orders Index
improving to marginal contraction, (2) New Export Orders Index
returning to contraction, (3) Backlog of Orders Index dropping into
stronger contraction territory, and (4) Customers' Inventories
Index moving into the low side of the 'just right' range, neutral
for future production. Output (measured by the Production
and Employment indexes) declined compared to May, with a combined
3.5-percentage point downward impact on the Manufacturing
PMI® calculation. Panelists' companies reduced
production levels month over month as head count reductions
continued in June. Inputs — defined as supplier deliveries,
inventories, prices and imports — continued to accommodate future
demand growth. The Prices Index eased but remained in expansion (or
'increasing') territory; the index registered its second month of
cooling increases.
"Demand remains subdued, as companies demonstrate an
unwillingness to invest in capital and inventory due to current
monetary policy and other conditions. Production execution was down
compared to the previous month, likely causing revenue declines,
putting pressure on profitability. Suppliers continue to have
capacity, with lead times improving and shortages not as severe.
Sixty-two percent of manufacturing gross domestic product (GDP)
contracted in June, up from 55 percent in May. More concerning is
the share of sector GDP registering a composite PMI®
calculation at or below 45 percent — a good barometer of overall
manufacturing weakness — was 14 percent in June, 10 percentage
points higher than the 4 percent reported in May," says Fiore.
The eight manufacturing industries reporting growth in June — in
order — are: Printing & Related Support Activities; Petroleum
& Coal Products; Primary Metals; Furniture & Related
Products; Paper Products; Chemical Products; Miscellaneous
Manufacturing; and Nonmetallic Mineral Products. The nine
industries reporting contraction in June — in the following order —
are: Textile Mills; Machinery; Fabricated Metal Products; Wood
Products; Transportation Equipment; Plastics & Rubber Products;
Food, Beverage & Tobacco Products; Electrical Equipment,
Appliances & Components; and Computer & Electronic
Products.
WHAT RESPONDENTS ARE SAYING
- "High volume of customer orders." [Chemical Products]
- "Customers continue to cut orders with short notice, causing a
ripple effect throughout lower-tier suppliers." [Transportation
Equipment]
- "Consumer demand and inventories are no longer stable at retail
and food service establishments." [Food, Beverage & Tobacco
Products]
- "While orders are still steady, inventory from the previous
month is enough to satisfy current- and near-term commitments."
[Computer & Electronic Products]
- "Customers ordering more to create buffer stocks (in case of)
future shortages." [Electrical Equipment, Appliances &
Components]
- "Order levels in two of our main divisions are indicating weak
demand, and now we must work to reduce inventory levels."
[Fabricated Metal Products]
- "Sales backlog is decreasing. We have furloughed a portion of
our workforce as a result." [Machinery]
- "The level of production is lower due to decreased demand for
products." [Miscellaneous Manufacturing]
- "Elevated financing costs have dampened demand for residential
investment. We have reduced inventories of production components."
[Wood Products]
- "Orders have increased slightly due to seasonal restocking."
[Plastics & Rubber Products]
MANUFACTURING AT A GLANCE
June 2024
|
Index
|
Series
Index
Jun
|
Series
Index
May
|
Percentage
Point
Change
|
Direction
|
Rate of
Change
|
Trend*
(Months)
|
Manufacturing PMI®
|
48.5
|
48.7
|
-0.2
|
Contracting
|
Faster
|
3
|
New Orders
|
49.3
|
45.4
|
+3.9
|
Contracting
|
Slower
|
3
|
Production
|
48.5
|
50.2
|
-1.7
|
Contracting
|
From Growing
|
1
|
Employment
|
49.3
|
51.1
|
-1.8
|
Contracting
|
From Growing
|
1
|
Supplier Deliveries
|
49.8
|
48.9
|
+0.9
|
Faster
|
Slower
|
4
|
Inventories
|
45.4
|
47.9
|
-2.5
|
Contracting
|
Faster
|
17
|
Customers' Inventories
|
47.4
|
48.3
|
-0.9
|
Too Low
|
Faster
|
7
|
Prices
|
52.1
|
57.0
|
-4.9
|
Increasing
|
Slower
|
6
|
Backlog of Orders
|
41.7
|
42.4
|
-0.7
|
Contracting
|
Faster
|
21
|
New Export Orders
|
48.8
|
50.6
|
-1.8
|
Contracting
|
From Growing
|
1
|
Imports
|
48.5
|
51.1
|
-2.6
|
Contracting
|
From Growing
|
1
|
OVERALL ECONOMY
|
Growing
|
Slower
|
50
|
Manufacturing Sector
|
Contracting
|
Faster
|
3
|
Manufacturing ISM® Report On
Business® data is seasonally adjusted for
the New Orders, Production, Employment and Inventories indexes.
*Number of months moving in current direction.
COMMODITIES REPORTED UP/DOWN IN PRICE AND IN SHORT
SUPPLY
Commodities Up in Price
Aluminum (7); Aluminum
Products; Copper (3); Electrical Components (2); Labor — Temporary
(2); Ocean Freight (2); Plastic Resins (6); Rubber Compounds; and
Titanium Dioxide.
Commodities Down in Price
Polypropylene; Solvents;
Steel (2); Steel — Carbon (3); Steel — Hot Rolled (2); Steel —
Scrap (2); and Steel Products.
Commodities in Short Supply
Electrical
Components (45); Electronic Components (3); and Steel — Carbon.
Note: The number of consecutive months the commodity is listed
is indicated after each item.
JUNE 2024 MANUFACTURING INDEX
SUMMARIES
Manufacturing PMI®
The U.S. manufacturing
sector contracted for the third consecutive month in June, as the
Manufacturing PMI® registered 48.5 percent, down 0.2
percentage point compared to May's reading of 48.7 percent. "After
breaking a 16-month streak of contraction by expanding in March,
the manufacturing sector has contracted the last three months, and
at a faster rate in June. None of five subindexes that directly
factor into the Manufacturing PMI® were in expansion
territory, down from two in May. The New Orders Index remained in
contraction but moved upward in June. Of the six biggest
manufacturing industries, only one (Chemical
Products) registered growth in June," says Fiore. A reading
above 50 percent indicates that the manufacturing sector is
generally expanding; below 50 percent indicates that it is
generally contracting.
A Manufacturing PMI® above 42.5 percent, over a
period of time, generally indicates an expansion of the overall
economy. Therefore, the June Manufacturing PMI®
indicates the overall economy grew for the 50th straight month
after one month of contraction (April
2020). "The past relationship between the Manufacturing
PMI® and the overall economy indicates that the
June reading (48.5 percent) corresponds to a change of
plus-1.7 percent in real gross domestic product (GDP) on an
annualized basis," says Fiore.
THE LAST 12 MONTHS
Month
|
Manufacturing
PMI®
|
Month
|
Manufacturing
PMI®
|
Jun 2024
|
48.5
|
Dec 2023
|
47.1
|
May 2024
|
48.7
|
Nov 2023
|
46.6
|
Apr 2024
|
49.2
|
Oct 2023
|
46.9
|
Mar 2024
|
50.3
|
Sep 2023
|
48.6
|
Feb 2024
|
47.8
|
Aug 2023
|
47.6
|
Jan 2024
|
49.1
|
Jul 2023
|
46.5
|
Average for 12 months –
48.1
High – 50.3
Low – 46.5
|
New Orders
ISM®'s New Orders Index
contracted in June for the third month, registering 49.3 percent,
an increase of 3.9 percentage points compared to May's figure of
45.4 percent. The New Orders Index hasn't indicated consistent
growth since a 24-month streak of expansion ended in May 2022. "Of the six largest manufacturing
sectors, two (Computer & Electronic Products; and Chemical
Products) reported increased new orders. Panelists' comments noted
a continued level of uncertainty and cautiousness as new order
levels and customer inventory accounts continue to underperform,"
says Fiore. A New Orders Index above 52.3 percent, over time,
is generally consistent with an increase in the Census Bureau's
series on manufacturing orders (in constant 2000 dollars).
The six manufacturing industries that reported growth in new
orders in June, in order, are: Primary Metals; Petroleum & Coal
Products; Furniture & Related Products; Computer &
Electronic Products; Chemical Products; and Miscellaneous
Manufacturing. The six industries reporting a decline in new orders
in June — in the following order — are: Fabricated Metal Products;
Textile Mills; Machinery; Transportation Equipment; Electrical
Equipment, Appliances & Components; and Food, Beverage &
Tobacco Products. Six industries reported no change in new orders
in June as compared to May.
New Orders
|
%Higher
|
%Same
|
%Lower
|
Net
|
Index
|
Jun 2024
|
20.3
|
59.1
|
20.6
|
-0.3
|
49.3
|
May 2024
|
19.0
|
57.4
|
23.6
|
-4.6
|
45.4
|
Apr 2024
|
19.9
|
63.2
|
16.9
|
+3.0
|
49.1
|
Mar 2024
|
26.1
|
57.7
|
16.2
|
+9.9
|
51.4
|
Production
The Production Index fell into contraction
territory in June, registering 48.5 percent, 1.7 percentage
points lower than the May reading of 50.2 percent. Of the six
largest manufacturing sectors, only one (Chemical Products)
reported increased production. "Panelists' companies marginally
reduced output levels compared to May. New order rates remain weak
and backlog levels continue to decline, as production output enters
contraction territory and companies are hesitant to invest in
intermediate goods and finished goods inventory due to economic
uncertainty," says Fiore. An index above 52.2 percent, over
time, is generally consistent with an increase in the Federal
Reserve Board's Industrial Production figures.
The eight industries reporting growth in production during the
month of June, in order, are: Printing & Related Support
Activities; Petroleum & Coal Products; Paper Products; Primary
Metals; Furniture & Related Products; Plastics & Rubber
Products; Chemical Products; and Miscellaneous Manufacturing. The
six industries reporting a decrease in production in June, in
order, are: Textile Mills; Fabricated Metal Products; Machinery;
Transportation Equipment; Electrical Equipment, Appliances &
Components; and Food, Beverage & Tobacco Products.
Production
|
%Higher
|
%Same
|
%Lower
|
Net
|
Index
|
Jun 2024
|
22.8
|
56.9
|
20.3
|
+2.5
|
48.5
|
May 2024
|
19.8
|
62.6
|
17.6
|
+2.2
|
50.2
|
Apr 2024
|
22.1
|
62.6
|
15.3
|
+6.8
|
51.3
|
Mar 2024
|
25.3
|
61.7
|
13.0
|
+12.3
|
54.6
|
Employment
ISM®'s Employment Index
registered 49.3 percent in June, 1.8 percentage points lower
than the May reading of 51.1 percent. "The index indicated
employment contracted after an expansion in May which broke a
seven-month streak of contraction. Of the six big manufacturing
sectors, only one (Fabricated Metal Products) expanded employment
in June. Many Business Survey Committee respondents' companies are
continuing to reduce head counts through layoffs, attrition and
hiring freezes. Panelists' comments in June indicated a marginal
decline in staff reductions compared to May, supported by the
approximately 1.3-to-1 ratio of hiring versus head-count reduction
comments," says Fiore. An Employment Index above 50.3 percent,
over time, is generally consistent with an increase in the Bureau
of Labor Statistics (BLS) data on manufacturing employment.
Of 18 manufacturing industries, the five industries reporting
employment growth in June are: Printing & Related Support
Activities; Nonmetallic Mineral Products; Wood Products; Fabricated
Metal Products; and Miscellaneous Manufacturing. The six industries
reporting a decrease in employment in June, in the following order,
are: Textile Mills; Chemical Products; Primary Metals; Plastics
& Rubber Products; Electrical Equipment, Appliances &
Components; and Machinery. Seven industries reported no change in
employment in June as compared to May.
Employment
|
%Higher
|
%Same
|
%Lower
|
Net
|
Index
|
Jun 2024
|
16.8
|
66.1
|
17.1
|
-0.3
|
49.3
|
May 2024
|
17.1
|
69.0
|
13.9
|
+3.2
|
51.1
|
Apr 2024
|
16.3
|
67.9
|
15.8
|
+0.5
|
48.6
|
Mar 2024
|
14.1
|
67.8
|
18.1
|
-4.0
|
47.4
|
Supplier Deliveries†
Delivery performance
of suppliers to manufacturing organizations was faster in June,
with the Supplier Deliveries Index registering 49.8 percent, a
0.9-percentage point gain compared to the reading of 48.9 percent
reported in May. This is the fourth consecutive month of
faster deliveries after one month of slower performance preceded by
16 straight months in "faster" territory. After a reading of 52.4
percent in September 2022, the index
went into contraction territory in October and remained there until
February. Of the six big industries, two (Chemical Products; and
Machinery) reported slower supplier deliveries in June. "On a
consistent basis in 2024, suppliers have supported customers
adequately by delivering faster, making more reliable promises and
slowly reducing lead times. Panelists continue to predict faster
supplier deliveries for the rest of the year," says Fiore. A
reading below 50 percent indicates faster deliveries, while a
reading above 50 percent indicates slower deliveries.
The four manufacturing industries reporting slower supplier
deliveries in June are: Petroleum & Coal Products;
Miscellaneous Manufacturing; Chemical Products; and Machinery. The
eight industries reporting faster supplier deliveries in June — in
the following order — are: Wood Products; Paper Products;
Electrical Equipment, Appliances & Components; Fabricated Metal
Products; Primary Metals; Plastics & Rubber Products; Computer
& Electronic Products; and Transportation Equipment. Six
industries reported no change in supplier deliveries in June as
compared to May.
Supplier
Deliveries
|
%Slower
|
%Same
|
%Faster
|
Net
|
Index
|
Jun 2024
|
8.8
|
82.0
|
9.2
|
-0.4
|
49.8
|
May 2024
|
6.2
|
85.3
|
8.5
|
-2.3
|
48.9
|
Apr 2024
|
8.1
|
81.6
|
10.3
|
-2.2
|
48.9
|
Mar 2024
|
9.0
|
81.7
|
9.3
|
-0.3
|
49.9
|
Inventories
The Inventories Index registered 45.4
percent in June, down 2.5 percentage points compared to the
reading of 47.9 percent reported in May. "Manufacturing
inventories contracted at a faster rate compared to the previous
month. None of the six big industries reported increased
manufacturing inventories in June. Demand uncertainty is causing
panelists' companies to reduce investment in inventory and remain
reliant on suppliers to carry 'on-demand' inventory," says Fiore.
An Inventories Index greater than 44.4 percent, over time, is
generally consistent with expansion in the Bureau of Economic
Analysis (BEA) figures on overall manufacturing inventories (in
chained 2000 dollars).
Of 18 manufacturing industries, four reported higher inventories
in June: Petroleum & Coal Products; Textile Mills; Electrical
Equipment, Appliances & Components; and Primary Metals. The 10
industries reporting lower inventories in June — in the following
order — are: Wood Products; Plastics & Rubber Products;
Machinery; Miscellaneous Manufacturing; Nonmetallic Mineral
Products; Furniture & Related Products; Computer &
Electronic Products; Transportation Equipment; Food, Beverage &
Tobacco Products; and Chemical Products.
Inventories
|
%Higher
|
%Same
|
%Lower
|
Net
|
Index
|
Jun 2024
|
11.3
|
67.9
|
20.8
|
-9.5
|
45.4
|
May 2024
|
14.4
|
66.4
|
19.2
|
-4.8
|
47.9
|
Apr 2024
|
13.1
|
67.7
|
19.2
|
-6.1
|
48.2
|
Mar 2024
|
16.0
|
66.2
|
17.8
|
-1.8
|
48.2
|
Customers' Inventories†
ISM®'s
Customers' Inventories Index registered 47.4 percent in June, down
0.9 percentage point compared to the 48.3 percent reported in May.
"Customers' inventory levels decreased at a faster rate in June,
with the index moving downward in 'about right' territory.
Panelists report their companies' customers have decreased amounts
of their products in inventory compared to the previous month,
which is considered neutral for future new orders and production,"
says Fiore.
The seven industries reporting customers' inventories as too
high in June, in order, are: Apparel, Leather & Allied
Products; Textile Mills; Plastics & Rubber Products; Wood
Products; Fabricated Metal Products; Transportation Equipment; and
Computer & Electronic Products. The seven industries reporting
customers' inventories as too low in June, in order, are:
Nonmetallic Mineral Products; Paper Products; Furniture &
Related Products; Food, Beverage & Tobacco Products; Chemical
Products; Primary Metals; and Machinery.
Customers'
Inventories
|
%
Reporting
|
%Too
High
|
%About
Right
|
%Too
Low
|
Net
|
Index
|
Jun 2024
|
78
|
13.6
|
67.5
|
18.9
|
-5.3
|
47.4
|
May 2024
|
75
|
14.8
|
66.9
|
18.3
|
-3.5
|
48.3
|
Apr 2024
|
76
|
15.6
|
64.3
|
20.1
|
-4.5
|
47.8
|
Mar 2024
|
75
|
8.9
|
70.2
|
20.9
|
-12.0
|
44.0
|
Prices†
The ISM® Prices Index
registered 52.1 percent, 4.9 percentage points lower compared
to the May reading of 57 percent, indicating raw
materials prices increased in June for the sixth month after eight
consecutive months of decreases. Of the six largest
manufacturing industries, three — Computer & Electronic
Products; Food, Beverage & Tobacco Products; and Chemical
Products — reported price increases in June. "The Prices Index
indicated expansion in June, but at slower rate compared to the
previous month. Commodity prices continue to be volatile,
especially fuel, natural gas, aluminum and plastics. Steel prices
are approaching long-term historical lows. Twenty percent of
companies reported higher prices in June, compared to 26 percent in
May, a clear improvement," says Fiore. A Prices Index above
52.8 percent, over time, is generally consistent with an
increase in the Bureau of Labor Statistics (BLS) Producer Price
Index for Intermediate Materials.
In June, the eight industries that reported paying increased
prices for raw materials, in order, are: Wood Products; Electrical
Equipment, Appliances & Components; Textile Mills; Paper
Products; Computer & Electronic Products; Food, Beverage &
Tobacco Products; Miscellaneous Manufacturing; and Chemical
Products. The three industries reporting paying decreased prices
for raw materials in June are: Petroleum & Coal Products;
Fabricated Metal Products; and Transportation Equipment. Seven
industries reported no change in prices in June as compared to
May.
Prices
|
%Higher
|
%Same
|
%Lower
|
Net
|
Index
|
Jun 2024
|
20.2
|
63.8
|
16.0
|
+4.2
|
52.1
|
May 2024
|
25.5
|
63.0
|
11.5
|
+14.0
|
57.0
|
Apr 2024
|
30.8
|
60.1
|
9.1
|
+21.7
|
60.9
|
Mar 2024
|
23.6
|
64.4
|
12.0
|
+11.6
|
55.8
|
Backlog of Orders†
ISM®'s
Backlog of Orders Index registered 41.7 percent, down 0.7
percentage point from the 42.4 percent reported in May, indicating
order backlogs contracted for the 21st consecutive month after a
27-month period of expansion. The index recorded its lowest rate
since November 2023, when it
registered 39.3 percent. None of the six largest manufacturing
industries reported expanded order backlogs in June. "The index
remained in contraction in June, as new order rates were
insufficient to allow backlogs to grow," says Fiore.
Of the 18 manufacturing industries, the only one that reported
growth in order backlogs in June is Primary Metals. The 14
industries reporting lower backlogs in June — in the following
order — are: Electrical Equipment, Appliances & Components;
Wood Products; Machinery; Nonmetallic Mineral Products; Textile
Mills; Petroleum & Coal Products; Fabricated Metal Products;
Paper Products; Food, Beverage & Tobacco Products; Computer
& Electronic Products; Plastics & Rubber Products;
Transportation Equipment; Chemical Products; and Miscellaneous
Manufacturing.
Backlog of
Orders
|
%
Reporting
|
%Higher
|
%Same
|
%Lower
|
Net
|
Index
|
Jun 2024
|
90
|
10.7
|
61.9
|
27.4
|
-16.7
|
41.7
|
May 2024
|
91
|
12.3
|
60.1
|
27.6
|
-15.3
|
42.4
|
Apr 2024
|
90
|
12.2
|
66.4
|
21.4
|
-9.2
|
45.4
|
Mar 2024
|
92
|
14.8
|
62.9
|
22.3
|
-7.5
|
46.3
|
New Export Orders†
ISM®'s New
Export Orders Index registered 48.8 percent in June, down 1.8
percentage points from May's reading of 50.6 percent. "The New
Export Orders Index reading indicates that export orders contracted
in June after expanding in May and contracting in April, with two
straight months of expansion before that. New export levels remain
sluggish as international trading partners continue to struggle
with slow moving economies," says Fiore.
The four industries reporting growth in new export orders in
June are: Nonmetallic Mineral Products; Paper Products; Chemical
Products; and Miscellaneous Manufacturing. The eight industries
reporting a decrease in new export orders in June — in the
following order — are: Fabricated Metal Products; Transportation
Equipment; Primary Metals; Plastics & Rubber Products;
Machinery; Food, Beverage & Tobacco Products; Electrical
Equipment, Appliances & Components; and Computer &
Electronic Products.
New Export
Orders
|
%
Reporting
|
%Higher
|
%Same
|
%Lower
|
Net
|
Index
|
Jun 2024
|
73
|
10.3
|
76.9
|
12.8
|
-2.5
|
48.8
|
May 2024
|
72
|
10.0
|
81.1
|
8.9
|
+1.1
|
50.6
|
Apr 2024
|
74
|
9.7
|
78.0
|
12.3
|
-2.6
|
48.7
|
Mar 2024
|
76
|
12.2
|
78.8
|
9.0
|
+3.2
|
51.6
|
Imports†
ISM®'s Imports Index
cooled in June with a reading of 48.5 percent, a decrease of 2.6
percentage points compared to May's figure of 51.1 percent.
"Imports contracted after five consecutive months of expansion
preceded by 14 consecutive months of contraction. Respondents'
companies continue to limit investment in inventory, as future
growth prospects remain cloudy. Ocean freight costs continue to
rise and access to equipment remains restricted as a result of
extended transit times, reducing available container and ship
availability," says Fiore.
The five industries reporting an increase in import volumes in
June are: Primary Metals; Plastics & Rubber Products; Food,
Beverage & Tobacco Products; Miscellaneous Manufacturing; and
Chemical Products. The six industries that reported lower volumes
of imports in June, in order, are: Wood Products; Nonmetallic
Mineral Products; Transportation Equipment; Machinery; Computer
& Electronic Products; and Fabricated Metal Products. Seven
industries reported no change in imports in June as compared to
May.
Imports
|
%
Reporting
|
%Higher
|
%Same
|
%Lower
|
Net
|
Index
|
Jun 2024
|
83
|
8.7
|
79.6
|
11.7
|
-3.0
|
48.5
|
May 2024
|
85
|
14.8
|
72.6
|
12.6
|
+2.2
|
51.1
|
Apr 2024
|
85
|
11.6
|
80.6
|
7.8
|
+3.8
|
51.9
|
Mar 2024
|
84
|
12.5
|
80.9
|
6.6
|
+5.9
|
53.0
|
†The Supplier Deliveries, Customers' Inventories,
Prices, Backlog of Orders, New Export Orders, and Imports indexes
do not meet the accepted criteria for seasonal adjustments.
Buying Policy
The average commitment lead time
for Capital Expenditures in June was 179 days, an
increase of seven days compared to May. Average lead time in June
for Production Materials was 80 days, the same as in May.
Average lead time for Maintenance, Repair and Operating (MRO)
Supplies was 43 days, a decrease of one day compared to
May.
Percent
Reporting
|
Capital
Expenditures
|
Hand-to-
Mouth
|
30 Days
|
60 Days
|
90 Days
|
6 Months
|
1 Year+
|
Average
Days
|
Jun 2024
|
14
|
3
|
11
|
14
|
28
|
30
|
179
|
May 2024
|
15
|
3
|
9
|
15
|
32
|
26
|
172
|
Apr 2024
|
17
|
4
|
8
|
13
|
32
|
26
|
170
|
Mar 2024
|
14
|
5
|
9
|
13
|
31
|
28
|
176
|
|
Percent
Reporting
|
Production
Materials
|
Hand-to-
Mouth
|
30 Days
|
60 Days
|
90 Days
|
6 Months
|
1 Year+
|
Average
Days
|
Jun 2024
|
8
|
24
|
27
|
28
|
9
|
4
|
80
|
May 2024
|
6
|
26
|
31
|
23
|
10
|
4
|
80
|
Apr 2024
|
7
|
23
|
29
|
30
|
7
|
4
|
79
|
Mar 2024
|
8
|
22
|
31
|
28
|
7
|
4
|
78
|
|
Percent
Reporting
|
MRO Supplies
|
Hand-to-
Mouth
|
30 Days
|
60 Days
|
90 Days
|
6 Months
|
1 Year+
|
Average
Days
|
Jun 2024
|
29
|
36
|
16
|
14
|
5
|
0
|
43
|
May 2024
|
29
|
38
|
15
|
13
|
4
|
1
|
44
|
Apr 2024
|
29
|
37
|
17
|
12
|
4
|
1
|
44
|
Mar 2024
|
25
|
40
|
18
|
12
|
5
|
0
|
44
|
About This Report
DO NOT CONFUSE THIS NATIONAL
REPORT with the various regional purchasing reports released across
the country. The national report's information reflects the entire
U.S., while the regional reports contain primarily regional data
from their local vicinities. Also, the information in the regional
reports is not used in calculating the results of the national
report. The information compiled in this report is for the month of
June 2024.
The data presented herein is obtained from a survey of
manufacturing supply executives based on information they have
collected within their respective organizations.
ISM® makes no representation, other than that
stated within this release, regarding the individual company data
collection procedures. The data should be compared to all
other economic data sources when used in decision-making.
Data and Method of Presentation
The Manufacturing
ISM® Report On Business® is based
on data compiled from purchasing and supply executives nationwide.
The composition of the Manufacturing Business Survey Committee is
stratified according to the North American Industry Classification
System (NAICS) and each of the following NAICS-based industries'
contribution to gross domestic product (GDP): Food, Beverage &
Tobacco Products; Textile Mills; Apparel, Leather & Allied
Products; Wood Products; Paper Products; Printing & Related
Support Activities; Petroleum & Coal Products; Chemical
Products; Plastics & Rubber Products; Nonmetallic Mineral
Products; Primary Metals; Fabricated Metal Products; Machinery;
Computer & Electronic Products; Electrical Equipment,
Appliances & Components; Transportation Equipment; Furniture
& Related Products; and Miscellaneous Manufacturing (products
such as medical equipment and supplies, jewelry, sporting goods,
toys and office supplies). The data are weighted based on each
industry's contribution to GDP. According to BEA estimates (the
average of the fourth quarter 2022 GDP estimate and the GDP
estimates for first, second, and third quarter 2023, as released on
December 21, 2023), the six largest
manufacturing industries are: Chemical Products; Transportation
Equipment; Food, Beverage & Tobacco Products; Computer &
Electronic Products; Machinery; and Fabricated Metal Products.
Survey responses reflect the change, if any, in the current
month compared to the previous month. For each of the indicators
measured (New Orders, Backlog of Orders, New Export Orders,
Imports, Production, Supplier Deliveries, Inventories, Customers'
Inventories, Employment and Prices), this report shows the
percentage reporting each response, the net difference between the
number of responses in the positive economic direction (higher,
better and slower for Supplier Deliveries) and the negative
economic direction (lower, worse and faster for Supplier
Deliveries), and the diffusion index. Responses are raw data and
are never changed. The diffusion index includes the percent of
positive responses plus one-half of those responding the same
(considered positive).
The resulting single index number for those meeting the criteria
for seasonal adjustments (Manufacturing PMI®, New
Orders, Production, Employment and Inventories) is then seasonally
adjusted to allow for the effects of repetitive intra-year
variations resulting primarily from normal differences in weather
conditions, various institutional arrangements, and differences
attributable to non-moveable holidays. All seasonal adjustment
factors are subject annually to relatively minor changes when
conditions warrant them. The Manufacturing PMI® is
a composite index based on the diffusion indexes of five of the
indexes with equal weights: New Orders (seasonally adjusted),
Production (seasonally adjusted), Employment (seasonally adjusted),
Supplier Deliveries, and Inventories (seasonally adjusted).
Diffusion indexes have the properties of leading indicators and
are convenient summary measures showing the prevailing direction of
change and the scope of change. A Manufacturing
PMI® reading above 50 percent indicates that the
manufacturing economy is generally expanding; below 50 percent
indicates that it is generally declining. A Manufacturing
PMI® above 42.5 percent, over a period of
time, indicates that the overall economy, or gross domestic product
(GDP), is generally expanding; below 42.5 percent, it is
generally declining. The distance from 50 percent or
42.5 percent is indicative of the extent of the expansion or
decline. With some of the indicators within this report,
ISM® has indicated the departure point between expansion
and decline of comparable government series, as determined by
regression analysis. The Manufacturing ISM® Report
On Business® survey is sent out to Manufacturing
Business Survey Committee respondents the first part of each month.
Respondents are asked to report on information for the current
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responses throughout most of any given month, with the majority of
respondents generally waiting until late in the month to submit
responses to give the most accurate picture of current business
activity. ISM® then compiles the report for release on
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Manufacturing ISM® Report On
Business® monthly report, are listed in the
order of most growth to least growth. For the industries reporting
contraction or decreases, those are listed in the order of the
highest level of contraction/decrease to the least level of
contraction/decrease.
Responses to Buying Policy reflect the percent reporting the
current month's lead time, the approximate weighted number of days
ahead for which commitments are made for Capital Expenditures;
Production Materials; and Maintenance, Repair and Operating (MRO)
Supplies, expressed as hand-to-mouth (five days), 30 days, 60 days,
90 days, six months (180 days), a year or more (360 days), and the
weighted average number of days. These responses are raw data,
never revised, and not seasonally adjusted.
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Kristina
Cahill
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Report On
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Arizona
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+1
480.455.5910
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Email:
kcahill@ismworld.org
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