Manufacturing contracts for first time in nearly 3 years

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Economic activity in the manufacturing sector contracted in June for the first time in almost three years, but the overall economy grew for the 37th consecutive month, the nation’s supply executives said in the latest Manufacturing ISM Report On Business released Monday, July 2.

The PMI registered 49.7 percent, a decrease of 3.8 percentage points from May’s reading of 53.5 percent, the first contraction since July 2009 when the PMI registered 49.2 percent.

The New Orders Index dropped 12.3 percentage points in June, registering 47.8 percent and indicating contraction in new orders for the first time since April 2009 when the index registered 46.8 percent.

The Production Index registered 51 percent in June, a decrease of 4.6 percentage points when compared to May, but nonetheless indicating growth for the 37th consecutive month.

“Comments from the panel range from continued optimism to concern that demand may be softening due to uncertainties in the economies in Europe and China,” said Bradley Holcomb, chair of the Institute for Supply Management Manufacturing Business Survey Committee.