A closely-watched manufacturing indicator, the Institute for Supply Management’s PMI Index, fell in June for the third month in a row to an anemic 51.7, continuing a downward trend since last August when the Index reached a 14-year high (a reading above 50 indicates expansion). These results were certainly influenced by the U.S.-China trade conflict and possible Mexico tariffs threatened last month, however both of these situations have since improved. New Orders were flat at 50.0 after falling -2.7 points. Prices contracted, falling -5.3 to 47.9. Survey respondent comments included:
“China tariffs and pending Mexico tariffs are wreaking havoc with supply chains and costs. The situation is crazy, driving a huge amount of work [and] costs, as well as potential supply disruptions.” (Computer & Electronic Products)
“Tariffs are causing an increase in cost of goods …” (Chemical Products)
“Global demand remains very strong.” (Food, Beverage & Tobacco Products)
“Tariffs continue to adversely impact decisions and forecasting.” (Fabricated Metal Products)
“Business is still strong. Pricing on raw materials has stabilized.” (Plastics & Rubber Products)
See full report here.