We remain optimistic for the outlook for manufacturing for the next three months based on the latest ISM PMI and PMPA Business Trends Indicators.
The latest Institute for Supply Management PMI (Purchasing Managers Index) increased 1.8 points to 57.1 for July. The July value was the 14th consecutive month of manufacturing expansion; the 62nd consecutive month of expansion in the broad economy, and the highest value since April 2011.
Using the July reading, this value indicates an expansion in manufacturing, but if annualized, is also consistent with a 4.6% rate of increase of real GDP according to ISM.
If the January through July data is annualized, the corresponding GDP growth would be about 3.7%.
PMPA’s June 2014 Business Trends Report showed a seasonal decline in shipments for the month of June, but the average for the year to date is 123, up 6 points (~5.1%) from last year’s 117 year end average.
PMPA’s Business Trends Indicator for Sales/ Shipments sentiment was strongly positive in June, with ~88% of respondents expecting sales to remain the same or increase over the next three months. and 89% of respondents expecting lead times to increase or remain the same for the next three months.
July ISM PMI GRAPH courtesy St Louis Fed