On Thursday, the ISM manufacturing activity index fell to 60.6 per cent from 61.2 per cent in May, according to the Institute for supply Management (ISM). The data show that the overall economy has expanded for 13 consecutive months after contracting in April 2020. The index of new orders was 66%, down 1 percentage point from 67% in May.
Although new orders have declined, production has rebounded, allowing manufacturers to make some progress in squeezing orders. Meanwhile, the ISM raw material price index rose to 92.1%, the highest level since 1979. Logistics challenges, rising commodity prices and various supply shortages continue to put pressure on manufacturers.
All six major manufacturing sectors, including computers and electronics, chemicals, fabricated metal products, transport equipment, food and beverage and tobacco products, oil and coal products, recorded moderate to strong growth in June.
Panel members of the Business Inquiry Board reported that their companies and suppliers continued their efforts to meet growing levels of demand. Record raw material delivery times, massive shortages of key basic materials, rising commodity prices and product transport difficulties continue to affect all sectors of the manufacturing economy. Problems such as a shortage of workers, short-term shutdowns caused by parts shortages and difficulties in filling vacant jobs continue to limit the growth potential of the manufacturing sector.