US Manufacturing Continues Decline

03 July 2003

Latest figures from the Institute for Supply Management show America’s factory sector continued to shrink last month.

The ISM’s index of manufacturing activity stood at 49.8 for June. This is up on May’s 49.4, but remains below the 50.0 threshold between expansion and contraction – the fourth month in a row it has done so.

The news disappointed economists, who had been expecting stronger growth.

However, there were some positives in the report. The component measuring new orders – a sign of future activity – rose from 51.9 to 52.2, while the gauge of unemployment rose from 43.0 to 46.2, signalling a slowdown in contraction.

The main source of weakness was the inventories index, which slipped from 46.1 to 41.3. There may, however, be a silver lining, as heavily slashed inventories will have to be built back up again later, helping to raise activity.

Data sourced from: The Wall Street Journal Online; additional content by WARC staff