ISM Manufacturing Index

ISM Manufacturing Index:  The Institute for Supply Management’s manufacturing index moved down 0.6 points month on month (m/m) to 60.6 for June 2021; this value is stronger than the forecast of 50.  The new orders sub-index was highest this month, scoring a 66.0. Overall, the ISM manufacturing index is strong, while the global economy is strengthening again following shutdowns throughout Covid-19.

The ISM manufacturing index is based on surveys of 300 purchasing managers in 18 industries. The survey is a diffusion index calculated as a percent of responses. A value of 50 is neutral, while less than 50 denotes contracting manufacturing activity and greater than 50 denotes expanding activity.


Figure 1 breaks down the composite index and sub-indexes. The employment sub-index was lowest this month, coming in at 49.9.

17 of 18 manufacturing industries reported growth in June, in the following order: Furniture & Related Products; Machinery; Electrical Equipment, Appliances & Components; Computer & Electronic Products; Plastics & Rubber Products; Chemical Products; Fabricated Metal Products; Transportation Equipment; Miscellaneous Manufacturing; Nonmetallic Mineral Products; Textile Mills; Primary Metals; Food, Beverage & Tobacco Products; Paper Products; Printing & Related Support Activities; Wood Products; and Petroleum & Coal Products.

“Demand continues to be strong, and customer-ordering patterns are shifting to include long-term demand. Customers are now placing orders for fourth quarter 2021 and first quarter 2022 due to global supply chain issues.” [Fabricated Metal Products]

At Gerdau, we closely monitor the ISM manufacturing index since it is an excellent barometer of the present strength, as well as a window on the likely short-run future, of U.S. manufacturing.



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