Here’s comes the recovery: Manufacturing output improves

ISM data jumps higher than expected, closes in on growth plateau

By Bob Vavra August 3, 2009

The Institute for Supply Management’s Manufacturing Index hit 48.9 in July, up more than 4 points from June. that was double the increase some analysts were expecting, triggering renewed hope that the manufacturing sector was ready to emerge from more than a year of sharp contraction and head toward growth.

"The decline in manufacturing was slower in July when compared to June, as the more leading components of the PMI – the New Orders and Production Indexes – rose significantly above 50%, thus setting an expectation for future growth in the sector," the report noted. "The Employment and Inventories Indexes are still contracting, but the rate is slowing and they are moving in the right direction. It is also worth noting that the New Export Orders Index shows growth following nine consecutive months of decline, suggesting that the global economy is recovering."

The report painted a modestly rosy picture. "Overall, it would be difficult to convince many manufacturers that we are on the brink of recovery, but the data suggests that we will see growth in the third quarter if the trends continue," the report concluded.


Author Bio: Bob is the Content Manager for Plant Engineering.