June ISM at 55.3 was well above expectations of 52 and certainly better than the fears of a below 50 print. It’s up from 53.5 in May but below the 4 straight months of above 60 in the prior months. The components were somewhat mixed. New Orders rose slightly to 51.6 from 51 but Backlogs fell back below 50 at 49.5 from 50.5. Exports fell 1.5 pts to the slowest since July ’09. Employment did rise to 59.9 from 58.2 but remains below the 6 month avg of 61.7. Inventories jumped at the customer level by 7.5 pts and for mfr’s by 5.4 pts to the most since Nov. Production was up a .5 pt. Prices Paid fell 8.5 pts to the lowest since Aug as commodity prices have moderated but the ISM said, “while the rate of price increases has slowed and the list of commodities up in price has shortened, commodity and input prices continue to be a concern across several industries. Of the 18 industries surveyed, just 12 reported growth. Bottom line, after falling a sharp 6.9 pts in May, the 2 point bounce back is certainly much better than feared but at 55.3, it is still the 2nd weakest since last Sept. We are now working thru the aftermath of Japan with the impact now somewhat modest on the procurement of parts so real end demand will drive trends from here on out and as seen around the world, manufacturing has moderated with the question being whether temporary or something more. While I’m hopeful for the former, I’m fearful of the latter as Asia purposely slows down, Europe deals with austerity in many parts and the US slugs along as the labor picture remains lackluster.
ISM much better than feared but components mixed
July 1, 2011 9:40am by
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