Manufacturing Reports Show No More Than Moderate Growth

The final manufacturing PMI for June is little changed from the flash, down 1 tenth to a 51.3 level that points to no more than modest growth for the sector. But the news is mostly good in June, at least compared to May when the index was even weaker at 50.7. June saw a pickup in new orders and a 2-year high in export growth. Production was also up as was employment. But inventories were down as the sample, in a defensive move, keeps a lid on restocking.

...meanwhile...

 ISM's sample is reporting significant acceleration to a level that is still, however, no more than moderate. The index easily beat expectations, at 53.2 in June and the best reading since February last year. New orders are especially solid, at 57.0 for a 1.3 point gain and the best reading since March. And export orders are keeping up, 1.0 point higher at 53.5 for the 4th straight plus-50 showing. Production is active, inventories may be on the climb, but employment is flat. A negative for profits but a plus for the inflation outlook is continued pressure in raw material costs. New orders are very closely watched in this report and the strength will lift expectations for June's factory data.

Recent History Of This Indicator:
The ISM manufacturing index is expected to hold steady, at a consensus 51.5 in June vs May's 51.3. New orders were steady and strong in May at 55.7 as were new export orders. May's order strength points to June strength for production and employment.