At a time when some aspects of the economy are still uncertain, and when manufacturing companies are sometimes having trouble finding the skilled workers that they need, it’s clear that companies are using technology to improve their productivity so that they can continue to meet the increasing demand for their products. This trend was highlighted in June’s Manufacturing Institute for Supply Management (ISM) Report on Business.
As we’ve mentioned in blog posts about other reports, the group measures how well each sector is doing using components such as PMI, a composite index based on five other indexes: New Orders (seasonally adjusted), Production (seasonally adjusted), Employment (seasonally adjusted), Supplier Deliveries (seasonally adjusted), and Inventories. The organization follows 18 industries, including Fabricated Metal Products and Primary Metals, among others.
In particular, though growth slowed a little in June compared with the previous month, the second quarter put in a solid performance after winter weather delays had an impact on manufacturing in the first quarter, writes the Wall Street Journal. Growth in new orders reached a seven-month high, and although the PMI actually fell in June after four straight months of expansion, it dropped by only a tenth.
Employment grew for the 12th month in a row, and registered the same growth as in May, with 9 out of the 18 manufacturing industries that the ISM report follows showing growth, and with only 5 showing a decline, the other 4 remaining unchanged. Some companies cited by the Journal reported that they had used the recession to increase the amount of automation in their factories, meaning that those businesses can now more easily catch up to their planned sales for the year after the slower-than-expected first quarter.
Out of the 18 manufacturing industries that the ISM report follows, 15 saw growth, including Fabricated Metal Products and Primary Metals. Only Textile Mills, Chemical Products, and Plastic & Rubber Products showed a decline.
Both new orders and production continued strong, with New Orders registering 2 percent higher than in May, and with the Production Index registering at 60 percent, though it was a percent lower than in May. “New order growth is more important than anything lagging or coincidental because it signifies expected increased demand ahead,” explains the investment site 24/7 Wall Street. In fact, several observers, including 24/7, credited the Dow’s new record close of over 17,000 to the upbeat manufacturing report.
Overall, good news on the manufacturing front this month. Let’s keep it coming!
Steve Leavitt, GM of U.S. Cloud Solutions for Exact