United States PMI June 2016

United States

United States: U.S. manufacturing sector gains more momentum in June

July 1, 2016

An increase in the ISM manufacturing index in June was a positive surprise and signals a gain in momentum in the U.S. manufacturing sector. The indicator rose from 51.3 in May to 53.2 in June and also came in above the 51.5 the markets had expected. The ISM index moved further above a 50-threshold that indicates an expansion in the manufacturing sector. A separate report issued by the ISM Institute showed that a majority of manufacturers saw “negligible” impact from Brexit.

The underlying details showed a broad-based improvement in June. Both new orders and manufacturing production rose over the previous month and reached a three-month high. Moreover, employment increased at the fastest level in seven months and supply delivery times improved notably, jumping to a high last seen in December 2014. Inventories rose again in June, which suggests that the sector’s inventory excess has not fully cleared.

FocusEconomics Consensus Forecast panelists expect that industrial production will increase 0.2% in 2016, which is down 0.2 percentage points from last month’s forecast. For 2017, panelists see industrial production expanding 2.2%.

Author:, Senior Economist

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United States PMI Chart

USA PMI June 2016 0

Note: Composite index in the Manufacturing Report on Business (PMI). Readings above 50% indicate an expansion in the manufacturing sector while readings below 50% point to a contraction.
Source: Institute for Supply Management.

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