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Sunday, September 27, 2020
HomeNewsEconomyISM Manufacturing Index (PMI) Beats Forecast in July, Continuing Expansion Cycle

ISM Manufacturing Index (PMI) Beats Forecast in July, Continuing Expansion Cycle

Manufacturing Export Wooden Crate, reading Made in USA. 3D Illustration for ISM Manufacturing Index (PMI). (Photo: AdobeStock)

PMI Surpasses Pre-Pandemic Level, Hits the Highest Level Since April 2019

Manufacturing Export Wooden Crate, reading Made in USA. 3D Illustration for ISM Manufacturing Index (PMI). (Photo: AdobeStock)
Manufacturing Export Wooden Crate, reading Made in USA. 3D Illustration for ISM Manufacturing Index (PMI). (Photo: AdobeStock)

Tempe, Arizona (PPD) — The Institute for Supply Management (ISM) Manufacturing Index (PMI) came in stronger than expected at 54.2% in July, up from 52.6% in June. This reading indicates an overall expansion in the economy for the third straight month after one month of contraction due to disruptive efforts to mitigate the spread of coronavirus (COVID-19).

Forecasts for the PMI ranged from a low of 49.0 to a high of 57.0, and the consensus forecast was 53.5.

The reading also indicates manufacturing sector growth continued for the second straight month after three prior months of COVID-19-related disruptions.

“Panel sentiment was generally optimistic (two positive comments for every one cautious comment), continuing a trend from June,” said Timothy R. Fiore, Chair of the ISM Manufacturing Business Survey Committee. “Demand and consumption continued to drive expansion growth, with inputs remaining at parity with supply and demand.”

Demand is growing as is evident by the strong gain in the New Orders Index at 61.5%. That represents an increase of 5.1 from the June reading of 56.4%. New orders are being supported by the New Export Orders Index re-entering expansion.

The ISM Manufacturing Index (PMI) has now exceeded pre-pandemic levels. It hasn’t been as high since April 2019. The rate of increase for the PMI is a level not seen since August 1980.

IndexSeries Index JulSeries Index JunPercentage Point ChangeDirectionRate of ChangeTrend* (Months)
PMI®54.252.6+1.6GrowingFaster2
New Orders61.556.4+5.1GrowingFaster2
Production62.157.3+4.8GrowingFaster2
Employment44.342.1+2.2ContractingSlower12
Supplier Deliveries55.856.9-1.1SlowingSlower9
Inventories47.050.5-3.5ContractingFrom Growing1
Customers’ Inventories41.644.6-3.0Too LowFaster46
Prices53.251.3+1.9IncreasingFaster2
Backlog of Orders51.845.3+6.5GrowingFrom Contracting1
New Export Orders50.447.6+2.8GrowingFrom Contracting1
Imports53.148.8+4.3GrowingFrom Contracting1
OVERALL ECONOMYGrowingFaster3
Manufacturing SectorGrowingFaster2
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.

Written by
Staff Writing Group

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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