Huge News on the manufacturing front in America, as numbers soared to a 15-month high in July, far exceeding economists’ expecations.
The Institute for Supply Management (ISM) business survey, published Aug. 3, shows that its topline manufacturing activity indicator, called the Purchasing Managers’ Index (PMI), surged to a reading of 54.2 in July.
Readings above 50 indicate expansion, while those below mean contraction.
“The PMI signaled a continued rebuilding of economic activity in July and reached its highest level of expansion since March 2019,” Timothy Fiore, chair of the ISM Manufacturing Business Survey Committee, said in a statement (pdf).
Economists polled by Reuters predicted the manufacturing index would rise to 53.6 in July, so the higher-than-expected number is encouraging, particularly in light of April’s 11-year low of 41.5.
“In July, manufacturing continued its recovery after the disruption caused by the coronavirus pandemic,” Fiore said.
Still, the slowing dynamics of month-over-month expansion in the manufacturing index, from 9.5 percentage point growth from May to June, compared to a 1.6 percentage point rise from June to July, fuel speculation about the sustainability of the economic recovery, especially in light of a recent surge in reported COVID-19 cases in parts of the country.
“Manufacturing is recovering from low levels and the outlook is uncertain, given the threat of repeated disruptions from virus outbreaks,” Rubeela Farooqi, chief U.S. economist at High Frequency Economics, told The Associated Press.
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