ISM Manufacturing Index
ISM Manufacturing Index: The Institute for Supply Management’s manufacturing index moved down -0.4% (m/m) to 48.5 for June 2024; this value is weaker than the forecast of 50. The new orders sub-index scored at 49.3. The reading pointed to a third straight month of falling manufacturing activity and the lowest since February, as demand was weak again, output declined, and inputs stayed accommodative.
The ISM manufacturing index is based on surveys of 300 purchasing managers in 17 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 backlogs sub-index was 41.7 this month, while the inventories sub-index was 45.4.
The eight manufacturing industries reporting growth in June — in order — are: Printing & Related Support Activities; Petroleum & Coal Products; Primary Metals; Furniture & Related Products; Paper Products; Chemical Products; Miscellaneous Manufacturing; and Nonmetallic Mineral Products. The nine industries reporting contraction in June — in the following order — are: Textile Mills; Machinery; Fabricated Metal Products; Wood Products; Transportation Equipment; Plastics & Rubber Products; Food, Beverage & Tobacco Products; Electrical Equipment, Appliances & Components; and Computer & Electronic Products.
“Sales backlog is decreasing. We have furloughed a portion of our workforce as a result.” [Machinery]
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.