Economic activity in the manufacturing sector expanded in July for the 24th consecutive month, but just barely, according to the latest report on manufacturing from the Institute for Supply Management. ISM’s composite PMI plunged 4.4 points to 50.9 percent. The threshold between an expanding manufacturing sector and a contracting one is 50 percent.
Another near-term worry for trucking is that the new orders index — one of the PMI components — dropped 2.4 points to 49.2, meaning that orders actually are contracting. Until July, the new orders index had grown for 24 consecutive months. Comments provided on the survey suggest that the slowdown in orders came from domestic demand and that export orders remain strong, said Bradley Holcomb, chair of ISM’s Manufacturing Business Survey Committee.
Seven of 18 industries that ISM tracks reported contraction during July: Apparel, leather & allied products; plastics & rubber products; textile mills; electrical equipment, appliances & components; food, beverage & tobacco products; machinery; and chemical products.