June 2017 Manufacturing Survey Growth Mixed

The ISM Manufacturing survey improved and remained in expansion. The key internals correlated and remained in expansion. The Markit PMI manufacturing Index, also released today, is in positive territory and marginally declined.

Analyst Opinion of the ISM Manufacturing Survey

ISM manufacturing index movements have correlated with Industrial Production Manufacturing index only half the time in the last 12 months. Based on this survey and the weak district Federal Reserve Surveys, one would expect the Fed’s Industrial Production index to be unchanged in June. Overall, surveys do not have a high correlation to the movement of industrial production (manufacturing) since the Great Recession.

From Bloomberg / Econoday:

Consensus Range Consensus Actual Markit Manufacturing 52.1 to 53.0 52.2 52.0 ISM Manufacturing 54.0 to 56.0 55.1 57.8

From the Markit PMI Manufacturing Index:

Manufacturing growth weakens again in June

Slowest rise in production volumes since September 2016

New order growth eases for fifth month running

Input prices broadly unchanged in June

June data pointed to a relatively subdued month for the U.S. manufacturing sector, with output, new order and employment growth all slowing since May. At the same time, survey respondents signalled resilient confidence towards the year ahead outlook, with optimism up to its strongest level since February. Meanwhile, cost pressures were the weakest recorded for 15 months, which resulted in the slowest pace of factory gate price inflation since late-2016.

The seasonally adjusted IHS Markit final US Manufacturing Purchasing Managers’ Index™ (PMI™) registered 52.0 in June, down from 52.7 during May, to signal the least marked improvement in overall business conditions since September 2016. Slower rates of output and new business growth were the main factors weighing on the headline PMI in June, which more than offset a stronger contribution from the stocks of purchases component.