The July 2011 Manufacturing ISM Report was devastating and sent stocks reeling downward.
The report was issued today by Bradley J. Holcomb, CPSM, CPSD, chair of the Institute for Supply Management Manufacturing Business Survey Committee. “The PMI registered 50.9 percent, a decrease of 4.4 percentage points, indicating expansion in the manufacturing sector for the 24th consecutive month, although at a slower rate of growth than in June. Production and employment also showed continued growth in July, but at slower rates than in June. The New Orders Index registered 49.2 percent, indicating contraction for the first time since June of 2009, when it registered 48.9 percent. The rate of increase in prices slowed for the third consecutive month, dropping 9 percentage points in July to 59 percent. In the last three months combined, the Prices Index has declined by 26.5 percentage points, dropping from 85.5 percent in April to 59 percent in July. Despite relief in pricing, however, several comments suggest a slowdown in domestic demand in the short term, while export orders continue to remain strong.”
Prices, employment, and, supplier data were particularly weak.
| MANUFACTURING AT A GLANCE JULY 2011 |
||||||
|---|---|---|---|---|---|---|
|
Index |
Series Index Jul |
Series Index Jun |
Percentage Point Change |
Direction |
Rate of Change |
Trend* (Months) |
| PMI | 50.9 | 55.3 | -4.4 | Growing | Slower | 24 |
| New Orders | 49.2 | 51.6 | -2.4 | Contracting | From Growing | 1 |
| Production | 52.3 | 54.5 | -2.2 | Growing | Slower | 26 |
| Employment | 53.5 | 59.9 | -6.4 | Growing | Slower | 22 |
| Supplier Deliveries | 50.4 | 56.3 | -5.9 | Slowing | Slower | 26 |
| Inventories | 49.3 | 54.1 | -4.8 | Contracting | From Growing | 1 |
| Customers’ Inventories | 44.0 | 47.0 | -3.0 | Too Low | Faster | 28 |
| Prices | 59.0 | 68.0 | -9.0 | Increasing | Slower | 25 |
| Backlog of Orders | 45.0 | 49.0 | -4.0 | Contracting | Faster | 2 |
| Exports | 54.0 | 53.5 | +0.5 | Growing | Faster | 25 |
| Imports | 53.5 | 51.0 | +2.5 | Growing | Faster | 23 |
| OVERALL ECONOMY | Growing | Slower | 26 | |||
| Manufacturing Sector | Growing | Slower | 24 | |||
*Number of months moving in current direction.
Douglas A. McIntyre
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