01 July 2013 16:04 [Source: ICIS news]
WASHINGTON (ICIS)--The overall US manufacturing sector resumed growth in June following a one-month contraction in May, a key survey said on Monday – but chemicals production was one of few major industries to report contraction last month.
In its monthly purchasing managers index (PMI), the Institute for Supply Management (ISM) said that the index gained 1.9 percentage points in June, raising the reading to 50.9% from May’s measure of 49%.
The PMI is a composite of supplier responses to the ISM’s monthly survey of 10 different business performance measures in 18 major manufacturing sectors.
A PMI reading above 50% indicates the US manufacturing sector is expanding, while an index measure below 50% means production is contracting.
The dip to 49% in May had marked the first contraction this year in the overall US manufacturing sector.
The bump back up to 50.9% for June was driven by solid gains in key subsidiary indexes, including an increase of 3.1 percentage points in new orders to 51.9%, a gain of 4.8 points in production to 53.4% and a 3.5 point improvement in exports to 54.5%.
However, the subsidiary index for the cost of raw materials showed a gain of 3 points in June, climbing to 52.5%.
The PMI also reported a 1.4 point decline in employment among manufacturers, edging into contraction with a reading of 48.7%.
ISM survey manager Bradley Holcomb noted that the June contraction in hiring marked the first such decline since September 2009, when the US recovery was getting off to a slow start.
Of the 18 manufacturing industries monitored by ISM, 12 reported growth in June, including the plastics and rubber sector.
In addition to chemicals, the three production industries reporting contraction in June were textile mills, computer and electronic products and transportation equipment.
An unidentified chemicals industry executive responded to the survey request for comment by saying: “Slow growth continues to choke the recovery. We are not out of the woods yet by any stretch of the imagination.”
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