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ISM Manufacturing Index (PMI) Beats Forecast in June, Returns to Expansion

U.S. Manufacturing Sector Enters Expansion Cycle Earlier than Economists Expected Post-Coronavirus

Tempe, Arizona (PPD) — The Institute for Supply Management (ISM) Manufacturing Index (PMI) came in stronger than expected at 52.6% in June, up from 43.1% in May. This reading indicates the overall economy in expansion for the second straight month after one month of contraction that ended 131 consecutive months of growth.

Forecasts for the PMI ranged from a low of 46.0 to a high of 51.5, and the consensus forecast was 49.0.

The reading also indicates the U.S. manufacturing sector entered an expansion cycle earlier than expected after the contraction caused by the efforts to mitigate the spread of coronavirus (COVID-19). The rate of increase for the PMI is a level not seen since August 1980.

Comments from the panel were positive (1.3 positive comments for every one cautious comment), reversing the cautious trend which began in March. The manufacturing sector is reversing the heavy contraction of April, with the PMI® increasing month-over-month at a rate not seen since August 1980, with several other indexes also posting gains not seen in modern times.

IndexSeries Index JunSeries Index MayPercentage Point ChangeDirectionRate of ChangeTrend* (Months)
PMI®52.643.1+9.5GrowingFrom Contracting1
New Orders56.431.8+24.6GrowingFrom Contracting1
Production57.333.2+24.1GrowingFrom Contracting1
Supplier Deliveries56.968.0-11.1SlowingSlower8
Customers’ Inventories44.646.2-1.6Too LowFaster45
Prices51.340.8+10.5IncreasingFrom Decreasing1
Backlog of Orders45.338.2+7.1ContractingSlower4
New Export Orders47.639.5+8.1ContractingSlower4
Manufacturing SectorGrowingFrom Contracting1
Manufacturing ISM Report On Business data is seasonally adjusted for the New Orders, Production, Employment and Inventories indexes.
*Number of months moving in current direction.


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PPD Business Staff

PPD Business, the economy-reporting arm of People's Pundit Daily, is "making sense of current events." We are a no-holds barred, news reporting pundit of, by, and for the people.

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