June 2014 Manufacturing ISM Report On Business - PMI At 55.3%

July 1, 2014

Economic activity in the manufacturing sector expanded in June for the 13th consecutive month, and the overall economy grew for the 61st consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business.

The report was issued today by Bradley J. Holcomb, CPSM, CPSD, chair of the Institute for Supply Management (ISM) Manufacturing Business Survey Committee.  "The June PMI registered 55.3 percent, a decrease of 0.1 percentage point from May's reading of 55.4 percent, indicating expansion in manufacturing for the 13th consecutive month.  The New Orders Index registered 58.9 percent, an increase of 2 percentage points form the 56.9 percent reading in May, indicating growth in new orders for the 13th consecutive month.  The Production Index registered 60 percent, 1 percentage point below the May reading of 61 percent.  Employment grew for the 12th consecutive month, registering 52.8 percent, the same level of growth as reported in May.  Inventories of raw materials remained at 53 percent, the same reading as reported in both May and April.  The price of raw materials grew at a slower rate in June, registering 58 percent, down 2 percentage points from May."

Manufacturing expanded in June as the PMI registered 55.3 percent, a slight decrease of 0.1 percentage point when compared to May's reading of 55.4 percent.  A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting. 

A PMI in excess of 43.2 percent, over a period of time, generally indicates an expansion of the overall economy.  Therefore, the June PMI indicates growth for the 61st consecutive month in the overall economy, and indicates expansion in the manufacturing sector for the 13th consecutive month.  Holcomb stated, "The past relationship between the PMI and the overall economy indicates that the average PMI for January through June (54.0 percent) corresponds to a 3.6 percent increase in real gross domestic product (GDP) on an annualized basis.  In addition, if the PMI for June (55.3 percent) is annualized, it corresponds to a 4.0 percent increase in real GDP annually."

Of the 18 manufacturing industries, 15 are reporting growth in June.

Source: Institute For Supply Management