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NEWS DESK WHAT’S NEW IN MANUFACTURING n Manufacturing Gets Mixed Marks at Midyear U


S manufacturing received mixed marks at the half- way mark of the year. The manufacturing economy showed signs of acceleration, but the jobs weren’t


reviving as much as production and orders.


The good news: The Insti- tute for Supply Management said its PMI, which measures economic activity in manufac- turing, was 53.2% in June, the best index reading in at least 12 months and an improve- ment from 51.3% in May. The


PMI was bolstered as production and new orders continued to rise and employment grew after six months of job losses. The report by ISM (Tempe, AZ) is based on a survey of


purchasing and supply executives. A reading above 50% indicates expansion and below 50% contraction. Through June, the PMI enjoyed a four-month streak above 50%. That followed a five-month streak of economic contraction.


increases in new orders, including textiles, petroleum and coal products, fabricated metals, furniture and miscel- laneous manufacturing. Five industries had decreases in new orders, including wood products, electrical equipment, primary metals and transportation equipment. The group’s Production Index was 54.7%, rising from 52.6% in May. The institute said 12 industries reported output increases, including miscellaneous manufacturing, petroleum and coal products, fabricated metal products and primary metals. Three industries reported decreases in pro- duction, including transportation equipment and machinery. Both the New Orders and Production indexes shown ex- pansion for six consecutive months. ISM’s Employment Index was 50.4% in May, following six months in negative territory. Separately, the US Bureau of Labor Statistics said manu- facturing added 14,000 jobs in May. However, almost all of the net gain occurred in food products.


Non-durable goods added 11,000 jobs while makers of durable goods only added 3000, according to the bureau.


The Institute for Supply Management’s index for the manufacturing economy was surging at midyear, but jobs presented a more mixed picture.


The June surge enabled the PMI to average 50.3% over 12 months, or barely in positive territory. Of 18 industries, 13 reported economic growth in June, including textiles, petroleum and coal products, fabricated metal products, miscellaneous manufacturing, primary metals and machinery. Three industries reported contraction: electrical equipment, transportation equipment and plastics and rubber products. Falling oil prices have been a drag on manufacturing for the past year, as orders for energy exploration equipment faltered. The June report by the institute represents a rare bright spot. Meanwhile, until recently, transportation equip- ment has been a positive in the monthly institute reports. Respondents to the institute’s survey described transporta- tion as still strong, but slowing. The institute’s New Orders Index was 57% in June, up from 55.7% in May. ISM said 12 industries reported


Food products added 13,000 jobs, with almost all other categories of non-durable goods posting job losses. Durable goods only added 3000 jobs.


Manufacturing jobs totaled 12.296 million in June on a seasonally adjusted basis. That compares to 12.282 million in May. The June figure was lower than the 12.325 million for June 2015. Within durable goods, job gainers included furniture (up 2800), electrical equipment and appliances (up 2700), mis- cellaneous manufacturing (up 1800) and machinery (up 900). Durable goods categories posting job losses included computer and electronic products (down 2100), non-metallic mineral products (down 1800) and transportation equipment (down 1500). Within transportation, motorized vehicles and parts lost 100 jobs. Until recently, the auto industry had been a bright spot in manufacturing employment. —Senior Editor Bill Koenig


August 2016 | AdvancedManufacturing.org 23


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