PMI Shows Slight Slowdown
Economic activity in the manufacturing sector expanded in July for the 12th consecutive month, and the overall economy grew for the 15th consecutive month, although July’s PMI of 55.5 percent was down a bit from June’s reading of 56.2 percent, according to the latest Manufacturing ISM Report On Business from the Institute for Supply Management, Tempe, Ariz.
“Manufacturing continued to grow during July, but at a slightly slower rate than in June,” says Norbert J. Ore, chairman of ISM’s Manufacturing Business Survey Committee. “Employment, supplier deliveries and inventories improved during the month and reduced the impact of a month-over-month deceleration in new orders and production.”
July marks 12 consecutive months of growth in manufacturing, he added, and demand appears quite strong in 10 of 18 industries.
While down from June, July’s PMI of 55.5 percent is still above the 50 percent level that indicates the manufacturing economy is generally expanding.
"The past relationship between the PMI and the overall economy indicates that the average PMI for January through July (58 percent) corresponds to a 5.4 percent increase in real gross domestic product. In addition, if the PMI for July is annualized, it corresponds to a 4.5 percent increase in real GDP annually," Ore adds.