Manufacturing Index Shows Expansion

The Institute for Supply Management’s (ISM) manufacturing index rose to 50.2 in June, up from the May reading of 49.6, CNN Money reports.  Economists were expecting a reading of 48.6, according to a consensus estimate compiled by Briefing.com. The tipping point for the index is 50, with a reading below that reflecting contraction in the sector.

The index showed that new orders for manufactured goods fell in June, the seventh consecutive month, to 49.6 from a reading of 49.7 in May.  June’s reading for new orders puts the index in the bottom third of its range over the last decade, according to Bob Brusca, an economist at FAO Economics.

The index’s measure of prices that manufacturers pay for materials rose to a reading of 91.5 in June, up 4.5% from May.  This is the highest reading for the index since it registered 93.2 in July 1979.

The index’s employment measure fell in June to 43.7 from 45.5 the month before.  It was the eighth month in a row that the measure has declined.  

On the bright side, the index showed that exports in June remained in the range of expansion.  The ISM’s measure of exports in June slipped to 58.5 from 59.5 in May.  That’s still a healthy reading and the export index has been growing for more than five years.  Imports, on the other hand, fell 3.5% to a reading of 46 from 49.5 the month before.