WASHINGTON • American manufacturers turned in another solid month in July amid steady growth in production, orders and employment, according to figures from the Institute for Supply Management (ISM) released yesterday.
The Purchasing Managers' Index (PMI) showed a reading of 56.3 from 57.8 a month earlier, indicating an expansion in manufacturing, which accounts for about 12 per cent of the US economy. Readings above 50 indicate growth.
While the ISM index settled back from a June level that was the second highest since 2011, it remains above the average over the past year, as are its three main gauges.
The figures signal that optimism about the economy is enduring among American businesses, even as prospects dissipate for swift changes on tax and infrastructure policy from lawmakers. Goods producers are sustaining progress that has been building since 2015. Steady US consumer and business demand, along with a recovering global economy, are allowing manufacturing to hit its stride.
A pick-up in the ISM's prices-paid index indicates more factories also reported paying higher prices for inputs and raw materials last month, also a reflection of improving world demand.
Meanwhile, factories in the euro zone started the second half with buoyant growth, which although slightly weaker than previously estimated was broad-based and appears to be sustainable, a survey by a separate private institute showed yesterday.
IHS Markit's final manufacturing PMI dipped to 56.6 from June's six-year high of 57.4, slightly down from a flash estimate of 56.8.
"Euro zone factories were buzzing with activity again in July," said IHS Markit chief business economist Chris Williamson. "The PMI came in slightly below the earlier flash estimate, slipping to a four-month low, but this is still an encouragingly buoyant reading."