Manufacturing Output Declines in June for Third Consecutive Month
The report highlights mixed performance across various manufacturing sectors and a cautious approach to inventory and spending
The ongoing run of manufacturing declines continued in June, with output falling for the third consecutive month, according to the new edition of the Manufacturing Report on Business, which was issued today by the Institute for Supply Management (ISM).
The report’s benchmark reading, the PMI, came in at 48.5 (a reading of 50 or higher indicates growth), down 0.2% from May’s 48.7, which was down 0.5% from April’s 49.2. April was off 1.1% compared to March’s 50.3 reading. March saw growth after a 16-month stretch of contraction—that was preceded by a stretch of 28 consecutive months of growth. ISM added that with May down, the PMI has contracted, at a faster rate, for three straight months, with the PMI not seeing growth in 19 of the last 20 months, with the overall economy growing, at a slower rate, for the 50th consecutive month.
The June PMI is 0.4% above the 12-month average of 48.1, with March’s 50.3 marking the high over that period, and July 2023 marking the lowest, at 46.5.
ISM reported that seven manufacturing sectors saw growth in June, including: Printing & Related Support Activities; Petroleum & Coal Products; Primary Metals; Furniture & Related Products; Paper Products; Chemical Products; Miscellaneous Manufacturing; and Nonmetallic Mineral Products. Sectors seeing contraction included: 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.
The report’s key metrics were mostly down in June, including:
- New Orders, which are considered the engine that drives manufacturing, increased 3.9%, to 49.3, contracting, at a slower rate, for the third consecutive month, with six sectors reporting growth;
- Production, at 48.5, down 1.7%, contracting after growing for three straight months, with eight sectors reporting growth;
- Employment, at 49.3, down1.8%, contracting after growing in May, which was preceded by seven months of contraction, with five sectors reporting growth;
- Supplier Deliveries, at 49.8 (a reading above 50 indicates contraction), were up 0.9% compared to May, growing faster, at a slower rate, for the fourth consecutive month, with four sectors reporting slower deliveries;
- Backlog of Orders, at 41.7, down 0.7%, contracting, at a faster rate, for the 21st consecutive month, with one sector reporting growth;
- Prices, at 52.1, down 4.9%, increasing, at a slower rate, for the sixth month in a row;
- Inventories, at 45.4, were off 2.5%, contracting, at a faster rate, for the 17th consecutive month, with four sectors reporting higher inventories; and
- Customers’ Inventories, at 47.4, down 0.9%, moving “too low,” at a faster rate, for the seventh consecutive month, with seven sectors reporting higher customers’ inventories
Article Topics
ISM News & Resources
Services economy activity contracts in June, notes ISM Services economy activity contracts in June, reports ISM Manufacturing Output Declines in June for Third Consecutive Month Manufacturing output falls again in June, reports ISM Manufacturing output slides again in June, reports ISM Service Sector Rebounds Strongly in May After April Decline Services economy activity returns to growth in May, reports ISM More ISMLatest in Supply Chain
Why Companies Should Look to LLMs, Not Chatbots, For Their AI Needs Retail Supply Chains Embrace AI to Improve ESG Compliance Optilogic and GM Form Partnership to Improve Supply Chain Efficiency Bellingham and San Diego Ports Secure Key RAISE Grants for Infrastructure Coyne Airways First to Offer Dangerous Goods Booking via WebCargo South Carolina Ports Halts Construction to Clear Vessel Backlog UK Logistics Company Speedy Freight Opens First US Branch in Dallas More Supply Chain
