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According to the most recent Manufacturing ISM Report on Business published by the Institute for Supply Management, economic activity in the US manufacturing sector increased in July, with the total economy growing for the 26th consecutive month (ISM). Eleven manufacturing sectors recorded growth in July, with the biggest growth being seen in the garment, leather, and related products sectors. The 11 industries, textile mills had the eighth-highest growth. Exports and imports increased, while new orders decreased and output and backlogs increased. In the month, raw material inventories increased, supplier deliveries slowed slightly, and prices also rose gradually. In comparison to June’s reading of 50.7 percent, the new export orders index reading of 52.6 percent increased by 1.9 percentage points. The imports index increased once more in July, rising by 3.7 percentage points to 54.4% from 50.7% in June.
1.2 percentage points below than the 49.2 percent reported in June, the new orders index read 48%. In comparison to June’s reading of 54.9 percent, the production index reading of 53.5 percent is down 1.4 percentage points. Additionally, the pricing index came in at 60%, down 18.5 percentage points from the June reading of 78.5%. Since August 2020, this is the index’s lowest reading (59.5 per cent).
A 1.9 percentage point decline from June’s 53.2 percent was seen in the backlog of orders indicator, which stood at 51.3%. The result of 55.2 percent for the supplier deliveries index is 2.1 points lower than the June value of 57.3 percent. Additionally, the inventory index came in at 57.3%, 1.3 percentage points higher than the June reading.
Textile mills reported the eighth highest growth among the 11.New orders contracted, production and backlogs grew and exports and imports grew. Supplier deliveries slowed at a slower rate, raw material inventories grew and prices too increased at a slower rate in the month. The new export orders index reading of 52.6 per cent was up by 1.9 percentage points compared to June’s figure of 50.7 per cent. The imports index grew again in July, up by 3.7 percentage points to 54.4 per cent from 50.7 per cent in June.
The new orders index registered 48 per cent—1.2 percentage points lower than the 49.2 per cent recorded in June. The production index reading of 53.5 per cent is a 1.4-percentage point decrease compared to June’s 54.9 per cent. And the prices index registered 60 per cent—down by 18.5 percentage points compared to the June figure of 78.5 per cent. This is the index’s lowest reading since August 2020 (59.5 per cent).
The backlog of orders index registered 51.3 per cent, 1.9 percentage points below June’s 53.2 per cent. The supplier deliveries index reading of 55.2 per cent is 2.1 percentage points lower than the June figure of 57.3 per cent. And the inventories index registered 57.3 per cent, 1.3 percentage points higher than the June reading of 56 per cent. Panelists are now expressing concern about a softening in the economy, as new order rates contracted for the second month amid developing anxiety about excess inventory in the supply chain.
