4 August 2009

Glass half full: Manufacturing index rises from June

The bad news is the U.S. manufacturing sector continued to shrink in July, but the good news is it is shrinking at a slower pace.

The Institute for Supply Management said its index of national factory activity rose to 48.9 in July from 44.8 in June.

While it is hardly a sure sign of the end of recessionary times, the July reading was the highest since August 2008.

A reading below 50 indicates contraction in manufacturing. The ISM index has not been above 50 since January 2008.

The manufacturing prices paid index climbed to 55.0 in July, its highest since August 2008, from 50.0 in June, while the employment index rose to 45.6, also the highest since August, from 40.7 in June.

The U.S. manufacturing new orders index climbed to 55.3, the highest since July 2007, from 49.2 in June.

“These are all very good numbers. They are all indicative of things getting back to some resemblance of normalcy,” said Robert Brusca, chief economist at Fact and Opinion Economics in New York.

For related information, go to www.isa.org/productivity.