The June ISM manufacturing index released by the United States on Friday (1st) fell to 53, the slowdown far exceeded the expected 54.9, and it was not as good as 56.1 in May, the lowest since June 2020, of which the new orders index was affected by long-term supply. Tensions and weak demand contracted for the first time in two years, further evidence that the economy is cooling as the Federal Reserve aggressively tightens monetary policy.
June U.S. ISM manufacturing sub-index: The new orders index was at 49.2, the previous value was 55.1, the production index was at 54.9, the previous value was 54.2, the employment index was at 47.3, the previous value was 49.6, the supplier delivery index was at 57.3, the previous value was 65.7, and the inventory index was at 56.0 , the previous value was 55.9, the client inventory index was reported at 35.2, the previous value was 32.7, the price index was reported at 78.5, the previous value was 82.2, the outstanding orders index was reported at 53.2, the previous value was 58.7, the export order index was reported at 50.7, the previous value was 52.9, the raw material import index was reported at 50.7, the previous value 48.7
The U.S. ISM manufacturing index in June reported 53. Although it was not above the 50 line of prosperity and decline, it was far below the market expectation of 54.5 and lower than the 56.1 in May, the lowest since June 2020.
While the slowdown in manufacturing activity partly reflects a shift in spending from goods to services, this is consistent with recent data showing rising interest rates dampening demand.
Looking at the breakdown of the index, the new orders index dropped by nearly 6 percentage points to 49.2, below the 50 line of prosperity and decline, the worst since May 2020, and far less than the 55.1 in May, when it hit a 3-month high.
The production index edged up to 54.9 from 54.2 in May; the employment index slipped further to 47.3 from 49.6 in May, suggesting the pace of manufacturing hiring will continue to slow, underscoring lingering labor-related capacity constraints.
The price index was reported at 78.5, down 3.7 percentage points from 82.2 in May, showing a continuous decline in recent months; the inventory index rose slightly, from 55.9 in May to 56, rewriting a new high since November last year.
The supplier deliveries index fell sharply to 57.3 from 65.7 in May, indicating shorter delivery times, while the backlog index fell to 53.2 from 58.7 in May, both indexes fell to new lows since 2020, revealing supply chains And capacity constraints appear to be showing signs of easing.
Timothy Fiore, chairman of the ISM Manufacturing Business Survey Committee, said that manufacturing growth is constrained by supply chains, and companies surveyed cited pricing as their biggest concern.
ISM Interviews Industry Comments:
The computer and electronics industry said accumulated orders remained high, but new orders slowed in June. Electrical equipment manufacturers pointed out that although orders and production continued to be strong, they were being dragged down by the supply of raw materials, and there was not enough time to digest the accumulated orders.
The garment industry said customers are responding to high inventories, but sales are falling, and orders are expected to decline in the coming months until inventories are properly balanced with demand.
The metal manufacturing industry said that business remained stable, but some customers canceled orders due to excess inventory; metal raw material suppliers said that the supply appeared to be stable to some extent, but how it will stabilize in the future is still a question.
Before the deadline, the four major U.S. stock indexes fell, the Dow Jones Industrial Average fell nearly 0.3%, the Nasdaq Composite fell 0.15%, the S&P 500 fell nearly 0.2%, and the Philadelphia Semiconductor Index fell nearly 4%.