Economic activity in the US manufacturing sector grew in July, with the apparel sector reporting growth in employment and imports, new figures show.
The latest Manufacturing ISM Report On Business, which surveys supply management professionals, shows economic activity notched up its third consecutive month of growth thanks to growth in new orders and production, and exports and imports.
Manufacturing grew in July as the PMI (Purchasing Managers’ Index) registered 54.2%, up 1.6 percentage points from the June reading of 52.6%.
“The PMI signalled a continued rebuilding of economic activity in July and reached its highest level of expansion since March 2019, when the index registered 54.6%,” says Timothy Fiore, chair of the Institute for Supply Management (ISM) Manufacturing Business Survey Committee. “Four of the big six industry sectors expanded.
“The New Orders and Production indexes returned to strong expansion levels. The Supplier Deliveries Index remained at a more normal level of tension between supply and demand. Seven of the ten subindexes registered expansion, up from five in June,” adds Fiore.
A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.
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By GlobalDataISM’s Imports Index registered 53.1% in July, up 4.3 percentage points compared to 48.8% in June, reflecting increased US demand. The index reached its highest level of expansion since February 2019, when it registered 55.3%.
Apparel, leather and allied products, and textile mills were among the 11 industries reporting growth in imports in July.
Textile mills also saw growth in production as the Index registered 62.1% in July, up 4.8 percentage points from 57.3% in June, indicating growth for the second consecutive month.
The sector, however, witnessed a decline in new orders in July, despite the New Orders Index registering 61.5%, an increase of 5.1 percentage points on June. It also reported slower supplier deliveries, with the Supplier Deliveries Index 1.1 percentage points lower than June at 55.8%, and a drop in employment growth.
ISM’s Employment Index registered 44.3%, 2.2 percentage points higher than the June reading of 42.1%. The apparel, leather and allied products industries was one of five to report employment growth for the month.
“This is the twelfth consecutive month of employment contraction, at a slower rate compared to June,” says Fior. “Only one of the six big industry sectors experienced expansion, as factories were able to achieve significant gains in output with a reduced labour pool.”
