United States ISM Purchasing Managers Index (PMI)July 2023 Data

The ISM Manufacturing PMI in the United States edged higher to 46.4 in July 2023 from a nearly three-year low of 46 in June, but below market expectations of 46.8. The reading pointed to a ninth straight month of contraction in factory activity, as demand remains weak, production slowed due to lack of work, and suppliers continue to have capacity. New orders (47.3 vs 45.6), production (48.3 vs 46.7), inventories (46.1 vs 44) and backlog of orders (42.8 vs 38.7) shrank slightly less while prices went down at a smaller pace (42.6 vs 41.8). On the other hand, employment fell more (44.4 vs 48.1) and the supplier deliveries index increased to 46.1 vs 45.7, indicating faster deliveries. Meanwhile, the Customers’ Inventories Index reading indicated appropriate buyer/supplier tension, which is neutral to slightly positive for future production.

The ISM Manufacturing PMI in the United States fell to 46 in June 2023, from 46.9 in May and below forecasts of 47. The reading pointed to a faster rate of contraction in the manufacturing sector since May 2020, with companies managing outputs down as softness continues and optimism about the second half of 2023 weakening. “Demand remains weak, production is slowing due to lack of work, and suppliers have capacity. There are signs of more employment reduction actions in the near term", Timothy Fiore, Chair of the ISM said. In June, declines were seen in new orders (45.6 vs 42.6), production (46.7 vs 51.1), employment (48.1 vs 51.4), inventories (44 vs 45.8) and backlog of orders (38.7 vs 37.5). Also, price pressures eased (41.8 vs 44.2) and the supplier deliveries index increased to 45.7 from 43.5, a sign manufacturing lead times improved again. On the other hand, the customers’ inventories index dropped into ‘too low’ territory (46.2 vs 51.4), a positive for future production.

The ISM Manufacturing PMI in the United States fell to 46.9 in May of 2023 from 47.1 in April, compared to forecasts of 47. The reading indicated a seventh consecutive month of contraction in the manufacturing sector, as companies "manage outputs to better align with demand in the first half of 2023 and prepare for growth in the late summer/early fall period. However, there is evidently increased business uncertainty in May," stated Timothy Fiore, Chair of the ISM Manufacturing Business Survey Committee. In May, new orders (42.6 vs 45.7), inventories (45.8 vs 46.3) and backlogs of orders (37.5 vs 43.1) contracted again. On the other hand, production rebounded (51.1 vs 48.9) and employment rose at a faster pace (51.4 vs 50.2), although companies continue to indicate near equal levels of activity toward expanding and contracting head counts, amid mixed sentiment about when significant growth will return. Also, price pressures decreased significantly (44.2 vs 53.2).