US July manufacturing activity continues to expand, but slows from June

Adam Yanelli

02-Aug-2021

HOUSTON (ICIS)–US manufacturing activity expanded for the 14th consecutive month in July, but at a slightly slower pace compared with the previous month, according to a report released on Monday.

The report from the Institute for Supply Management (ISM) said the July PMI came in at 59.5%, a decrease of 1.1 percentage points from June.

Any reading above 50 indicates expansion in manufacturing activity and below 50 indicates contraction.

ISM chair Timothy Fiore said companies and suppliers continue to struggle to meet increasing demand levels.

“As we enter the third quarter, all segments of the manufacturing economy are impacted by near record-long raw-material lead times, continued shortages of critical basic materials, rising commodities prices and difficulties in transporting products,” Fiore said.

Manufacturing faced headwinds in the month from worker absenteeism, short-term shutdowns due to parts shortages and difficulties in filling open positions, businesses surveyed for the report said.

Panellists continue to be optimistic about future growth with 13 positive comments to every cautious comment, the ISM said.

“Comments indicate slight improvements in labour and supplier deliveries offset by continued problems in the transportation sector,” the report said.

Seventeen of 18 manufacturing industries reported growth in July.

A survey participant from the chemical industry indicated supply-chain issues are slowly getting better.

“Supply chains are slowly, very slowly filling up,” the participant said.

“Like a water hose, starting upstream and slowly flowing downstream. Rumour is a full return to ‘normal’ may be nearer to year’s end, but the situation is progressing. Transportation [equipment and drivers] is the current pinch point, more so than material shortages,” the participant said.

READ MORE

Global News + ICIS Chemical Business (ICB)

See the full picture, with unlimited access to ICIS chemicals news across all markets and regions, plus ICB, the industry-leading magazine for the chemicals industry.

Contact us

Now, more than ever, dynamic insights are key to navigating complex, volatile commodity markets. Access to expert insights on the latest industry developments and tracking market changes are vital in making sustainable business decisions.

Want to learn about how we can work together to bring you actionable insight and support your business decisions?

Need Help?

Need Help?