Economy: ISM Manufacturing Index for July 2019

Earlier today, the Institute for Supply Management® (ISM®) released their Manufacturing Purchasing Manager's Index (PMI®) for July 2019:

Predicted: 51.9%
Actual: 51.2% (-0.5 point month-on-month change)

=========

Previous month: 51.7%

=========

Every month, the ISM surveys purchasing and supply executives at hundreds of companies across the country who are involved in manufacturing in some form. The resulting index is watched closely by academics, economists and investors because manufacturing accounts for about 12% of U.S. Gross Domestic Product (GDP).

The PMI is a reliable barometer of U.S. manufacturing: A PMI above 50% implies that U.S. manufacturing expanded during the month specified, while a reading below 50% implies that the made-in-the-USA sector contracted.

=========

From Today's Report:

"...Economic activity in the manufacturing sector expanded in July, and the overall economy grew for the 123^RD consecutive month, say the nation’s supply executives in the latest Manufacturing ISM® Report On Business®..."

=========

The following is a sampling of quotes from a diverse pool of U.S. manufacturers:

'General business trends are continuing to show signs of weakness resulting from tariffs and cost impacts of importing and exporting.'
(Electrical Equipment, Appliances + Components)

'Business is strong mostly due to seasonality. Tariffs surcharges are now being passed through to all customers. Labor is tight, putting pressure on wages costs.'
(Furniture + Related Products)

'All aspects of business remain strong, but we’re starting to see the frictional effect of tariffs on exports.'
(Plastics + Rubber Products)

'We are a third-tier supplier to [a major aircraft manufacturer], and it appears its production slowdown of [an aircraft] is having a direct effect on our slowing orders.'
(Miscellaneous Manufacturing)

'Business has slowed, but it is still steady and expected to pick up next month.'
(Machinery)

'There is a drop in demand for steel products, which has had a major impact on steel prices and the domestic scrap market.'
(Fabricated Metal Products)

'The economy is holding steady. All the uncertainty seems to be priced in accordingly, and supply plans are consistent throughout 2019. Business conditions improving yet still facing headwinds in foreign exchange, commodities, and certain direct materials."
(Food, Beverage + Tobacco Products)

'[Automotive] sales continue to decline, and forecasts have been reduced due to softer predicted demand. Attention to product cost — not sales price — is increasing.'
(Transportation Equipment)

'Weakness in end markets accelerating rapidly. Continuing to reduce production based on weakening demand and declining current orders.'
(Chemical Products)

'China tariffs continue to be a concern. The uncertainty of future tariffs involving China, Canada, and Mexico is also a concern. China tariffs for electronic parts are averaging 17 percent.'
(Computer + Electronic Products)

=========