United States: Manufacturing hits two-year high
July 31, 2013
In July, the ISM manufacturing index increased to 55.4%, up from 50.9% in June. The increase exceeded market expectations of 53.1%. Building on the gains registered last month, the index is now at its highest point in more than two years.
The majority of the components of the index increased over the previous month, with three of the four indicators now sitting above the 50% threshold indicating an expansion. The rise in the employment index to 54.4% was the most notable, while the production index surged 11.6 percentage points to 65% and new orders increased to 58.3%. The inventory index was the only one that dropped, falling by 3.5 percentage points to 47%.
FocusEconomics Consensus Forecast panellists project that industrial output will rise 2.8% this year, which is down 0.4 percentage points from last month's forecast. For 2014, panellists see industrial production accelerating to a 4.1% expansion.
Author: Carl Kelly, Economist