On Monday purchasing managers index stated that manufacturing has been expanded for july but at a slower rate as the months before. From June to July manufacturing has dropped from 56.2 to 55.5 according to ISM, The Institute for Supply Management. While any score higher than 50 is considered growth, reports show that for July growth has been better but at a slower rate.
July showed higher supplier deliveries, employment and prices throughout the industry. In 10 of 18 industries demand is still very strong as July marked the 12th consecutive month in manufacturing growth. Among the 10 industries which reported substantial growth were electrical equipment & appliances and rubber and plastic products.
With the drop of index by 5 points for the last 3 months manufacturing growth has slowed down. In April the reading was at 60.4 which was the highest growth rate in the last 6 years. Paul Dales, a Capital Economics economist said that this slow down is consistent with the economic recovery we are going through. He also noted to investors that the survey done by the ISM for July provides proof of what economists were expecting, a economic recovery until early next year without a 2nd recession.
Another positive sign which has been observed is the employment sections has seen a increase in hiring throughout the industry. This was reported by the chief economist of MAPI Dan Meckstroth. He also stated that some firms are afraid at this time to increase their hiring and so they increase productivity time. This increase in hiring is a sign that industries are sure of incoming contracts and new orders.