U.S. manufacturing grows 14th consecutive month

U.S. economic activity in the manufacturing sector grew in July for the 14th consecutive month, while the overall economy grew for the 33rd consecutive month, said the nation's supply executives in the latest Manufacturing ISM Report On Business®.

The report was issued August 2, by Norbert J. Ore, C.P.M., chair of the Institute for Supply Management (ISM) Manufacturing Business Survey Committee and group director, strategic sourcing and procurement, Georgia-Pacific Corp. "The manufacturing sector continues to grow at a rapid rate as the PMI has now been above 60 percent for nine consecutive months. This is the longest period of growth above 60 percent since the 12-month period of July 1972 through June 1973, when the index was over 60 percent for each month and reached a high of 72.1 percent in January 1973. The growth of New Orders and Production accelerated during the month, adding strength to the index. Employment grew at a slower rate, while the Inventories Index declined."

The Prices Index continues to moderate, but the prices manufacturers pay still are an issue. Customers' Inventories Index indicates that customer inventories are too low at this time. The Backlog of Orders Index indicates that order backlogs increased in July. The New Export Orders and Import Indexes continued to grow in July.

Comments from respondents indicated that many consider their business to be "strong," with a number indicating significant year-over-year improvement. Others continue to indicate only minor improvement. Energy prices remain a major concern for purchasers, as prices are at or near record highs. It appears that the steel supply situation has improved as there are fewer mentions of shortages.

In July, 18 industries reported growth, including primary metals and fabricated metals, which also reported growth in new orders and production. Neither reported employment growth.