The ISM Manufacturing Index rose for the third straight month in July indicating a steady improvement in manufacturing in the US, after COVID-19 related shutdowns plunged the sector’s volumes to an all-time low in the March-May period.

 

The index, which rose by 1.6 percentage points from June to 54.2pc in July, indicated growing order books and production in the manufacturing sector along with rising imports and exports. However, the Institute of Supply Management (ISM), which publishes this benchmark monthly index, noted that employment and supplier deliveries were still growing at a slower pace. 

 

Depleting customer inventories indicate rising demand, but supply is still a challenge as raw materials inventories for manufacturers contracted in July. According to Timothy R. Fiore, chair of ISM’s Manufacturing Business Survey Committee, demand and consumption continued to drive the manufacturing sector’s growth in July with 13 of the 18 manufacturing industries tracked by ISM reporting a growth.

 

Transportation equipment, machinery, and fabricated metal products were the only three industries that reported contraction in July. Respondents from the fabricated metals segment said that while the outlook for the industry in H2 2020 was stable, the business was currently experiencing a significant reduction in demand. Moreover, fabricated metals export orders to regions like Brazil, South Africa, and the Middle East were largely cancelled for the rest of the year.

 

 

 

 

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