Manufacturing Growth Rises Again
Manufacturing growth continues to climb upward, according to an Institute for Supply Management report released today.
After June's index reading rose 1.9 percentage points to reach 50.9%, this report brings another month of increasing gains at 55.4%, the highest reading in two years. Based on surveys of purchasing managers, a reading above 50% indicates that the manufacturing economy is generally expanding, while below 50% indicates that it is generally contracting.
Although analysts had expected another solid rise, their 51.3% prediction proved below the mark. July's reading of 55.4% reflects the sixth month of growth, and the highest overall PMI reading, in the first seven months of 2013.
On a component-by-component basis, production made a massive 11.6-point gain to hit 65%, the highest reading since May 2004. Employment also picked up another 5.7 points to 54.4%, marking a return to expansion in employment, following only two months of contraction in the past 47 months. New orders headed 6.4 points higher to 58.3% as a potentially positive sign for future sales. This is the highest reading for the index since April 2011.
Inventories, customers' inventories, prices, and order backlogs all fell below the 50% mark, with prices and inventories taking a 3.5-point dip. Exports also fell one point to 53.5%, although imports picked up 1.5 points to 57.5%.
Of the 18 manufacturing industries interviewed for the index, only four (plastics & rubber products, apparel, leather & applied products, machinery, and miscellaneous) reported contraction. Furniture made the largest gains in July, followed by textile mills and printing & related support activities.
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