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ISM: PMI Down, But Manufacturing Continues to Grow

The Institute for Supply Chain Management (ISM) reports that economic activity in the manufacturing sector grew for the eleventh consecutive month in June, and the overall economy grew for the fourteenth consecutive month.

PMI was measured at 56.2, a drop from last month's rate of 59.7, but still an indication of growth.

"The manufacturing sector continued to grow during June. However, the rate of growth as indicated by the PMI slowed when compared to May. The lower reading for the PMI came from a slowing in the New Orders and Production Indexes. We are now 11 months into the manufacturing recovery, and given the robust nature of recent growth, it is not surprising that we would see a slower rate of growth at this time. The sector appears to be solidly entrenched in the recovery. Comments from the respondents remain generally positive, but expectations have been that the second half of the year will not be as strong in terms of the rate of growth, and June appears to validate that forecast," said Norbert J. Ore, chair of ISM's Manufacturing Business Survey Committee.

Surveyed companies provided comments that didn't exhibit such a positive forecast. A Fabricated Metal Products business said "The BP oil spill will impact business conditions over the next few months." A Computer and Electronic company noted "Component lead times are increasing sharply." And a Wood Products firm said "The market has begun to change, but it is now declining again."

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