Manufacturing Growth Cools in June

Source: Institute for Supply Management

Manufacturing output expanded for the 13th straight month in June, albeit at a slower rate, on the back of supply shortages, commodity price hikes, and transportation issues.

• The Manufacturing PMI stood at 60.6%, slower than the 61.2 recorded in May. This is the 13th straight month of expansion since April 2020.
• All the six major industries registered moderate to strong growth for the month. These include computers and electronics, chemicals, fabricated metal, transportation equipment, food beverage and tobacco, and petroleum and coal.
• Declines were recorded in new orders, which fell to 66.0% from 67.0%, supplier deliveries down to 75.1% from 78.8%, and the backlog of orders to 64.5% from 70.6%.
• Increases were seen in production, employment, inventories, prices, new export orders, and imports.
• Respondents attributed the declines to the record-long lead times for raw materials, lack of basic materials, high commodity prices, and shipping difficulties.
• Growth was also limited by issues on attracting workers, absenteeism, and shutdowns caused by shortages.
• Demand continues to be strong, with customers already placing orders for the fourth quarter of 2021 and the first quarter of 2022.