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Malaysian Reserve
02-08-2025
- Business
- Malaysian Reserve
Manufacturing PMI® at 48%; July 2025 Manufacturing ISM® Report On Business®
New Orders and Backlogs Contracting; Production Growing and Employment Contracting; Supplier Deliveries Faster; Raw Materials Inventories Contracting; Customers' Inventories Too Low; Prices Increasing; Exports and Imports Contracting TEMPE, Ariz., Aug. 1, 2025 /PRNewswire/ — Economic activity in the manufacturing sector contracted in July for the fifth consecutive month, following a two-month expansion preceded by 26 straight months of contraction, say the nation's supply executives in the latest Manufacturing ISM® Report On Business®. The report was issued today by Susan Spence, MBA, Chair of the Institute for Supply Management® (ISM®) Manufacturing Business Survey Committee: 'The Manufacturing PMI® registered 48 percent in July, a 1-percentage point decrease compared to the 49 percent recorded in June. The overall economy continued in expansion for the 63rd month after one month of contraction in April 2020. (A Manufacturing PMI® above 42.3 percent, over a period of time, generally indicates an expansion of the overall economy.) The New Orders Index contracted for the sixth month in a row following a three-month period of expansion; the figure of 47.1 percent is 0.7 percentage point higher than the 46.4 percent recorded in June. The July reading of the Production Index (51.4 percent) is 1.1 percentage points higher than June's figure of 50.3 percent. The Prices Index remained in expansion (or 'increasing') territory, registering 64.8 percent, down 4.9 percentage points compared to the reading of 69.7 percent reported in June. The Backlog of Orders Index registered 46.8 percent, up 2.5 percentage points compared to the 44.3 percent recorded in June. The Employment Index registered 43.4 percent, down 1.6 percentage points from June's figure of 45 percent. 'The Supplier Deliveries Index indicated faster delivery performance after seven consecutive months in expansion (or 'slower') territory. The reading of 49.3 percent is down 4.9 percentage points from the 54.2 percent recorded in June. (Supplier Deliveries is the only ISM® Report On Business® index that is inversed; a reading of above 50 percent indicates slower deliveries, which is typical as the economy improves and customer demand increases.) The Inventories Index registered 48.9 percent, down 0.3 percentage point compared to June's reading of 49.2 percent. 'The New Export Orders Index reading of 46.1 percent is 0.2 percentage point lower than the reading of 46.3 percent registered in June. The Imports Index registered 47.6 percent, 0.2 percentage point higher than June's reading of 47.4 percent.' Spence continues, 'In July, U.S. manufacturing activity contracted at a faster rate, with declines in the Supplier Deliveries and Employment Indexes contributing as the biggest factors in the 1-percentage point loss of the Manufacturing PMI®. 'The demand indicators improved, with the New Orders and Backlog of Orders indexes contracting at slower rates, while the Customers' Inventories and New Export Orders indexes contracted at slightly faster rates. A 'too low' status for the Customers' Inventories Index is usually considered positive for future production. 'Regarding output, the Production Index increased month over month to move further into expansion territory, however; the Employment Index dropped further into contraction as panelists indicated that managing head count is still the norm at their companies, as opposed to hiring. The mixed indicators in output suggest companies still being cautious in their hiring even with an increase in production. 'Finally, inputs (defined as supplier deliveries, inventories, prices and imports), on net, declined further into contraction territory. The Inventories Index moved marginally further into contraction territory after expanding in April, as companies work to reduce or adjust inventory to better align with demand. The Supplier Deliveries Index indicated faster deliveries as supply chain performance improved and sluggish demand continued. Prices continued to increase, but at a slower rate. The Imports Index remained in contraction but moved upward slightly. 'Looking at the manufacturing economy, 79 percent of the sector's gross domestic product (GDP) contracted in July, up from 46 percent in June. Notably, 31 percent of GDP is strongly contracting (registering a composite PMI® of 45 percent or lower), up from 25 percent in June. The share of sector GDP with a PMI® at or below 45 percent is a good metric to gauge overall manufacturing weakness. Of the six largest manufacturing industries, none expanded in July, compared to four in June,' says Spence. The seven manufacturing industries reporting growth in July — listed in order — are: Apparel, Leather & Allied Products; Plastics & Rubber Products; Nonmetallic Mineral Products; Textile Mills; Miscellaneous Manufacturing; Furniture & Related Products; and Primary Metals. The 10 industries reporting contraction in July — in the following order — are: Printing & Related Support Activities; Paper Products; Chemical Products; Machinery; Wood Products; Fabricated Metal Products; Computer & Electronic Products; Transportation Equipment; Electrical Equipment, Appliances & Components; and Food, Beverage & Tobacco Products. WHAT RESPONDENTS ARE SAYING 'Fairly flat quarter over quarter, but with us being in the safety and security sector (and with U.S. Customs and Border Protection as a customer), the recent bill that passed should result in an increase in business in the coming months.' [Computer & Electronic Products] 'Sales continue at unprecedented growth, driven by data-center construction. Customers and the sales team continue to demand lower pricing, which drives down gross margins in face of input price increases, primarily from aluminum imports.' [Chemical Products] 'These tariff wars are beginning to wear us out. It's been very difficult to forecast what we will pay in duties and calculate any cost savings we've had this year. Also, tariffs have disrupted our customs import bond. There is zero clarity about the future, and it's been a difficult few months trying to figure out where everything is going to land and the impact on our business. So far, tremendous and unexpected costs have been incurred.' [Apparel, Leather & Allied Products] 'Currently, higher interest rates still depress the construction industry for new construction projects. Tariff policies are uncertain, which slows down (1) our investment in new projects, (2) component sourcing for new products, (3) blanket orders and (4) replenishment of large inventory quantities. Instead, we're working to shift suppliers to lower political risk countries or develop domestic sources. We are impacted by the higher tariffs on costs of raw materials and components both sourced domestically and from overseas, and we expect expenses will be higher in the third and fourth quarters as we consume the inventory received with new and higher tariffs or update costs from domestic sources in the second quarter.' [Machinery] 'Sales softening more than usual during the summer. Negotiations with non-U.S. manufacturers are strained as we are reluctant to issue POs for deliveries three or more months into the future with prices that include current tariffs.' [Fabricated Metal Products] 'In the health-care world we continue with 'business as normal,' but we are increasingly searching and assessing geopolitical risk mitigation options.' [Miscellaneous Manufacturing] 'Tariffs are causing complete uncertainty around sourcing strategies. A sit-and-wait game for now.' [Electrical Equipment, Appliances & Components] 'Sales are about on par with 2024, but nowhere near budget forecast. Tariff concerns seem to be growing as the year progresses.' [Nonmetallic Mineral Products] 'Business is steady, with solid bookings and backlog. Still uncertainty about tariffs and associated inflation.' [Furniture & Related Products] 'Energy capacity, specifically in the grid operated by PJM Interconnection, continues to be one of the major concerns for business continuity and growth in this region. The procurement of power and rising natural gas prices in this region due to past green energy policies, coupled with future projected allocations for artificial intelligence data centers, adds additional stress to the PJM system.' [Primary Metals] 'Cautiously stable. Tariff impacts are still being monitored. Some increases have been implemented while monitoring other products.' [Transportation Equipment] MANUFACTURING AT A GLANCE July 2025 Index SeriesIndex Jul SeriesIndex Jun Percentage Point Change Direction Rate of Change Trend* (Months) Manufacturing PMI® 48.0 49.0 -1.0 Contracting Faster 5 New Orders 47.1 46.4 +0.7 Contracting Slower 6 Production 51.4 50.3 +1.1 Growing Faster 2 Employment 43.4 45.0 -1.6 Contracting Faster 6 Supplier Deliveries 49.3 54.2 -4.9 Faster From Slower 1 Inventories 48.9 49.2 -0.3 Contracting Faster 3 Customers' Inventories 45.7 46.7 -1.0 Too Low Faster 10 Prices 64.8 69.7 -4.9 Increasing Slower 10 Backlog of Orders 46.8 44.3 +2.5 Contracting Slower 34 New Export Orders 46.1 46.3 -0.2 Contracting Faster 5 Imports 47.6 47.4 +0.2 Contracting Slower 4 OVERALL ECONOMY Growing Slower 63 Manufacturing Sector Contracting Faster 5 Manufacturing ISM® Report On Business® data is seasonally adjusted for the New Orders, Production, Employment and Inventories indexes. *Number of months moving in current direction. COMMODITIES REPORTED UP/DOWN IN PRICE AND IN SHORT SUPPLY Commodities Up in PriceAluminum (20); Aluminum Products; Brass Products; Copper; Copper Products; Corrugated Boxes (5); Electrical Components (6); Electronic Components (6); Fabricated Metal Components; Freight; Polypropylene; Steel (6); Steel — Stainless (5); Steel Products (5); and Wire Products. Commodities Down in PriceCorn; Natural Gas; Ocean Freight; and Soybean Meal. Commodities in Short SupplyElectrical Components, Electronic Components (5); and Rare Earth Magnets. Note: The number of consecutive months the commodity is listed is indicated after each item. JULY 2025 MANUFACTURING INDEX SUMMARIES Manufacturing PMI® The U.S. manufacturing sector contracted in July for the fifth consecutive month after two months of expansion preceded by 26 months of contraction. 'The Manufacturing PMI® registered 48 percent, 1 percentage point lower compared to the 49 percent reported in June. Of the five subindexes that directly factor into the Manufacturing PMI®, only one (Production) is in expansion territory, down from two in June. The slowing of supplier deliveries in previous months reversed course, with a 4.9-percentage point index decrease indicating a drawdown of manufacturing inventories and easing port congestion. The Employment Index decreased and it remained with New Orders in contraction territory. None of the six biggest manufacturing industries registered growth in July,' says Spence. A reading above 50 percent indicates that the manufacturing sector is generally expanding; below 50 percent indicates that it is generally contracting. A Manufacturing PMI® above 42.3 percent, over a period of time, generally indicates an expansion of the overall economy. Therefore, the July Manufacturing PMI® indicates the overall economy grew for the 63rd straight month after contracting in April 2020. 'The past relationship between the Manufacturing PMI® and the overall economy indicates that the July reading (48 percent) corresponds to a change of plus-1.6 percent in real gross domestic product (GDP) on an annualized basis,' says Spence. THE LAST 12 MONTHS Month Manufacturing PMI® Month Manufacturing PMI® Jul 2025 48.0 Jan 2025 50.9 Jun 2025 49.0 Dec 2024 49.2 May 2025 48.5 Nov 2024 48.4 Apr 2025 48.7 Oct 2024 46.9 Mar 2025 49.0 Sep 2024 47.5 Feb 2025 50.3 Aug 2024 47.5 Average for 12 months – 48.7 High – 50.9 Low – 46.9 New OrdersISM®'s New Orders Index contracted in July for the sixth consecutive month after three consecutive months of expansion, registering 47.1 percent, an increase of 0.7 percentage point compared to June's figure of 46.4 percent. This reading is below the 12-month moving average (48.3 percent) for the New Orders Index, which hasn't indicated consistent growth since a 24-month streak of expansion ended in May 2022. 'Of the six largest manufacturing sectors, none reported increased new orders. Panelists noted continued weak demand, with a 1-to-1.4 ratio of positive comments to those expressing concern about near-term demand. Overall, new orders continue to slow amid tariff uncertainty; which party will pay tariff costs is still the prime issue in negotiations between buyers and sellers,' says Spence. A New Orders Index above 52.1 percent, over time, is generally consistent with an increase in the Census Bureau's series on manufacturing orders (in constant 2000 dollars). The four manufacturing industries that reported growth in new orders in July are: Apparel, Leather & Allied Products; Plastics & Rubber Products; Primary Metals; and Miscellaneous Manufacturing. The eight industries reporting a decline in new orders in June, in order, are: Paper Products; Wood Products; Petroleum & Coal Products; Nonmetallic Mineral Products; Fabricated Metal Products; Machinery; Chemical Products; and Computer & Electronic Products. Six industries reported no change in new orders in July. New Orders %Higher %Same %Lower Net Index Jul 2025 18.8 55.3 25.9 -7.1 47.1 Jun 2025 20.5 52.2 27.3 -6.8 46.4 May 2025 25.0 48.1 26.9 -1.9 47.6 Apr 2025 28.1 45.2 26.7 +1.4 47.2 ProductionThe Production Index continued in expansion territory for the second consecutive month in July, registering 51.4 percent, 1.1 percentage points higher than the June reading of 50.3 percent. Prior to the readings of expansion in January and February, the index was in contraction territory for eight consecutive months, with the previous reading above 50 percent in April 2024 (50.7 percent). Of the six largest manufacturing sectors, two (Petroleum & Coal Products; and Transportation Equipment) reported increased production. 'Production levels in July, while improved, remain fragile amid continuing softness in new orders. Panelists had a 1-to-1.2 ratio of positive to negative comments regarding output,' says Spence. An index above 52.1 percent, over time, is generally consistent with an increase in the Federal Reserve Board's Industrial Production figures. The seven industries reporting growth in production during the month of July — in the following order — are: Apparel, Leather & Allied Products; Textile Mills; Petroleum & Coal Products; Plastics & Rubber Products; Nonmetallic Mineral Products; Miscellaneous Manufacturing; and Transportation Equipment. The six industries reporting a decrease in production in July, in order, are: Paper Products; Machinery; Fabricated Metal Products; Primary Metals; Electrical Equipment, Appliances & Components; and Chemical Products. Production %Higher %Same %Lower Net Index Jul 2025 20.1 60.7 19.2 +0.9 51.4 Jun 2025 20.7 60.6 18.7 +2.0 50.3 May 2025 19.1 56.3 24.6 -5.5 45.4 Apr 2025 19.8 56.0 24.2 -4.4 44.0 EmploymentISM®'s Employment Index registered 43.4 percent in July, 1.6 percentage points lower than June's reading of 45 percent. 'The index posted its sixth consecutive month of contraction after expanding in January, with seven straight months of contraction before that. Since May 2022, the Employment Index has contracted in 32 of 39 months. Of the six big manufacturing sectors, none reported expanded employment in July. For every comment on hiring, there were two on reducing head counts — a fairly wide ratio, historically speaking — reflecting companies' continuing focus on accelerating staff reductions due to uncertain near- to mid-term demand. Layoffs were the primary measure, an indication that staff shrinking continues to be urgent,' says Spence. An Employment Index above 50.3 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) data on manufacturing employment. Of the 18 manufacturing industries, three reported employment growth in July: Nonmetallic Mineral Products; Miscellaneous Manufacturing; and Plastics & Rubber Products. The 11 industries reporting a decrease in employment in July, in the following order, are: Textile Mills; Printing & Related Support Activities; Paper Products; Primary Metals; Fabricated Metal Products; Computer & Electronic Products; Machinery; Food, Beverage & Tobacco Products; Electrical Equipment, Appliances & Components; Chemical Products; and Transportation Equipment. Employment %Higher %Same %Lower Net Index Jul 2025 12.6 62.4 25.0 -12.4 43.4 Jun 2025 10.4 72.1 17.5 -7.1 45.0 May 2025 14.1 68.2 17.7 -3.6 46.8 Apr 2025 13.1 70.7 16.2 -3.1 46.5 Supplier Deliveries†Delivery performance of suppliers to manufacturing organizations was faster in July after seven months of slowing, with the Supplier Deliveries Index registering 49.3 percent, a 4.9-percentage point decrease compared to the reading of 54.2 percent reported in June. Of the six big industries, two (Food, Beverage & Tobacco Products; and Computer & Electronic Products) reported slower supplier deliveries in July. 'The findings in July suggest that supply chain performance is improving as demand is slipping downward,' says Spence. A reading below 50 percent indicates faster deliveries, while a reading above 50 percent indicates slower deliveries. The nine manufacturing industries reporting slower supplier deliveries in July — in the following order — are: Nonmetallic Mineral Products; Furniture & Related Products; Paper Products; Plastics & Rubber Products; Primary Metals; Electrical Equipment, Appliances & Components; Food, Beverage & Tobacco Products; Computer & Electronic Products; and Fabricated Metal Products. The four industries reporting faster supplier deliveries in July are: Miscellaneous Manufacturing; Transportation Equipment; Chemical Products; and Machinery. Supplier Deliveries %Slower %Same %Faster Net Index Jul 2025 8.7 81.1 10.2 -1.5 49.3 Jun 2025 14.7 79.0 6.3 +8.4 54.2 May 2025 19.1 73.9 7.0 +12.1 56.1 Apr 2025 16.6 77.2 6.2 +10.4 55.2 InventoriesThe Inventories Index registered 48.9 percent in July, down 0.3 percentage point compared to the reading of 49.2 percent in June. 'Of the six big industries, only one (Food, Beverage & Tobacco Products) expanded in July,' says Spence. An Inventories Index greater than 44.5 percent, over time, is generally consistent with expansion in the Bureau of Economic Analysis (BEA) figures on overall manufacturing inventories (in chained 2000 dollars). Of 18 manufacturing industries, the 10 reporting higher inventories in July — listed in order — are: Apparel, Leather & Allied Products; Textile Mills; Paper Products; Nonmetallic Mineral Products; Primary Metals; Plastics & Rubber Products; Miscellaneous Manufacturing; Fabricated Metal Products; Electrical Equipment, Appliances & Components; and Food, Beverage & Tobacco Products. The five industries reporting lower inventories in July are: Wood Products; Chemical Products; Computer & Electronic Products; Transportation Equipment; and Machinery. Inventories %Higher %Same %Lower Net Index Jul 2025 15.2 67.2 17.6 -2.4 48.9 Jun 2025 15.6 64.9 19.5 -3.9 49.2 May 2025 15.6 63.2 21.2 -5.6 46.7 Apr 2025 20.8 59.2 20.0 +0.8 50.8 Customers' Inventories†ISM®'s Customers' Inventories Index registered a reading of 45.7 percent in July, a decrease of 1 percentage point compared to the reading of 46.7 percent in June. 'Customers' inventory levels in July continued to contract and took a step away from 'about right' territory,' says Spence. (For more information about the Customers' Inventories Index, see the 'Data and Method of Presentation' section below.) The three industries reporting customers' inventories as too high in July are: Wood Products; Miscellaneous Manufacturing; and Transportation Equipment. The 11 industries reporting customers' inventories as too low in July, in order, are: Textile Mills; Printing & Related Support Activities; Primary Metals; Nonmetallic Mineral Products; Electrical Equipment, Appliances & Components; Fabricated Metal Products; Paper Products; Furniture & Related Products; Chemical Products; Food, Beverage & Tobacco Products; and Machinery. Customers' Inventories % Reporting %Too High %About Right %TooLow Net Index Jul 2025 71 10.5 70.3 19.2 -8.7 45.7 Jun 2025 72 14.1 65.2 20.7 -6.6 46.7 May 2025 69 9.9 69.2 20.9 -11.0 44.5 Apr 2025 76 11.1 70.2 18.7 -7.6 46.2 Prices†The ISM® Prices Index registered 64.8 percent in July, decreasing 4.9 percentage points compared to the June reading of 69.7 percent, indicating raw materials prices increased for the 10th straight month (at a slower rate) after a decrease in September. The Prices Index has increased 9.9 percentage points over the past six months. In the last five months, the index reached its highest levels since June 2022, when it registered 78.5 percent. All of the six largest manufacturing industries — Machinery; Chemical Products; Food, Beverage & Tobacco Products; Computer & Electronic Products; Petroleum & Coal Products; and Transportation Equipment, in that order — reported price increases in July. 'The Prices Index reading continues to be driven by increases in steel and aluminum prices that impact the entire value chain, as well as tariffs applied to many imported goods. Higher prices were reported by 35.4 percent of respondents in July, down substantially from 45.6 percent in June. The share of respondents reporting higher prices had consistently increased from November 2024 (12.2 percent) to April (49.2 percent), which was the highest level since June 2022 (65.2 percent),' says Spence. A Prices Index above 52.8 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) Producer Price Index for Intermediate Materials. In July, the 16 industries that reported paying increased prices for raw materials, in order, are: Nonmetallic Mineral Products; Textile Mills; Furniture & Related Products; Primary Metals; Plastics & Rubber Products; Machinery; Wood Products; Electrical Equipment, Appliances & Components; Fabricated Metal Products; Miscellaneous Manufacturing; Chemical Products; Food, Beverage & Tobacco Products; Computer & Electronic Products; Petroleum & Coal Products; Paper Products; and Transportation Equipment. No industries reported paying decreased prices for raw materials in July. Prices %Higher %Same %Lower Net Index Jul 2025 35.4 58.8 5.8 +29.6 64.8 Jun 2025 45.6 48.1 6.3 +39.3 69.7 May 2025 45.1 48.5 6.4 +38.7 69.4 Apr 2025 49.2 41.1 9.7 +39.5 69.8 Backlog of Orders†ISM®'s Backlog of Orders Index registered 46.8 percent, an increase of 2.5 percentage points compared to the June reading of 44.3 percent, indicating order backlogs contracted for the 34th consecutive month after a 27-month period of expansion that ended September 2022. Of the six largest manufacturing industries, only Food, Beverage & Tobacco Products reported expansion in order backlogs in July. 'Continued contraction in both the New Orders and Backlog of Orders indexes means that trade issues and other geopolitical tensions are still at play. Significant improvement shouldn't be expected until those issues begin to recede,' says Spence. Of the 18 manufacturing industries, the three that reported growth in order backlogs in July are: Furniture & Related Products; Food, Beverage & Tobacco Products; and Electrical Equipment, Appliances & Components. The eight industries reporting lower backlogs in July — in the following order — are: Paper Products; Nonmetallic Mineral Products; Plastics & Rubber Products; Wood Products; Machinery; Computer & Electronic Products; Fabricated Metal Products; and Chemical Products. Seven industries reported no change in order backlogs. Backlog of Orders % Reporting %Higher %Same %Lower Net Index Jul 2025 89 18.3 56.9 24.8 -6.5 46.8 Jun 2025 91 14.9 58.7 26.4 -11.5 44.3 May 2025 92 15.8 62.6 21.6 -5.8 47.1 Apr 2025 92 15.1 57.2 27.7 -12.6 43.7 New Export Orders†ISM®'s New Export Orders Index contracted in July, registering 46.1 percent, down 0.2 percentage point from June's reading of 46.3 percent. 'Export orders contracted for the fifth consecutive month after growing in January and February. This brief period of expansion followed an 'unchanged' status (a reading of 50 percent), preceded by six straight months of contraction. The continued contraction of new export orders could be indicative of ongoing trade friction and dampened demand,' says Spence. Of the 18 manufacturing industries, the only industry reporting growth in new export orders in July is Furniture & Related Products. The eight industries reporting a decrease in new export orders in July — in the following order — are: Paper Products; Primary Metals; Plastics & Rubber Products; Fabricated Metal Products; Electrical Equipment, Appliances & Components; Chemical Products; Miscellaneous Manufacturing; and Machinery. Eight industries reported no change in new export orders in July. New Export Orders % Reporting %Higher %Same %Lower Net Index Jul 2025 71 7.5 77.2 15.3 -7.8 46.1 Jun 2025 75 12.1 68.3 19.6 -7.5 46.3 May 2025 73 11.8 56.5 31.7 -19.9 40.1 Apr 2025 74 8.7 68.8 22.5 -13.8 43.1 Imports†ISM®'s Imports Index remained in contraction for the fourth month in July after expanding for three straight months. The July figure of 47.6 percent is an increase of 0.2 percentage point over the reading of 47.4 percent in June. 'Imports are contracting, though at a slower rate. The need to maintain import levels from previous months is lower, due in large part to slackening demand and tariff pricing,' says Spence. The five industries reporting an increase in import volumes in July are: Textile Mills; Food, Beverage & Tobacco Products; Plastics & Rubber Products; Miscellaneous Manufacturing; and Fabricated Metal Products. The six industries that reported lower volumes of imports in July — in the following order — are: Wood Products; Petroleum & Coal Products; Paper Products; Computer & Electronic Products; Chemical Products; and Machinery. Seven industries reported no change in imports in July. Imports % Reporting %Higher %Same %Lower Net Index Jul 2025 86 13.3 68.5 18.2 -4.9 47.6 Jun 2025 86 15.3 64.2 20.5 -5.2 47.4 May 2025 85 13.2 53.3 33.5 -20.3 39.9 Apr 2025 82 15.4 63.4 21.2 -5.8 47.1 †The Supplier Deliveries, Customers' Inventories, Prices, Backlog of Orders, New Export Orders, and Imports indexes do not meet the accepted criteria for seasonal adjustments. Buying PolicyThe average commitment lead time for Capital Expenditures in July was 173 days, a decrease of two days compared to June. The average lead time in July for Production Materials was 85 days, the same as in June. The average lead time for Maintenance, Repair and Operating (MRO) Supplies was 44 days, a decrease of four days compared to June. Percent Reporting Capital Expenditures Hand-to- Mouth 30 Days 60 Days 90 Days 6 Months 1 Year+ Average Days Jul 2025 16 4 10 15 26 29 173 Jun 2025 17 3 9 13 29 29 175 May 2025 18 2 9 14 30 27 171 Apr 2025 16 4 11 14 28 27 169 Percent Reporting Production Materials Hand-to- Mouth 30 Days 60 Days 90 Days 6 Months 1 Year+ Average Days Jul 2025 9 28 22 26 8 7 85 Jun 2025 9 22 28 26 9 6 85 May 2025 8 24 30 24 9 5 81 Apr 2025 10 24 25 26 9 6 84 Percent Reporting MRO Supplies Hand-to- Mouth 30 Days 60 Days 90 Days 6 Months 1 Year+ Average Days Jul 2025 31 35 17 12 4 1 44 Jun 2025 32 33 17 11 5 2 48 May 2025 31 35 16 10 7 1 47 Apr 2025 31 33 18 12 5 1 46 About This ReportDO NOT CONFUSE THIS NATIONAL REPORT with the various regional purchasing reports released across the country. The national report's information reflects the entire U.S., while the regional reports contain primarily regional data from their local vicinities. Also, the information in the regional reports is not used in calculating the results of the national report. The information compiled in this report is for the month of July 2025. The data presented herein is obtained from a survey of manufacturing supply executives based on information they have collected within their respective organizations. ISM® makes no representation, other than that stated within this release, regarding the individual company data collection procedures. The data should be compared to all other economic data sources when used in decision-making. Data and Method of PresentationThe Manufacturing ISM® Report On Business® is based on data compiled from purchasing and supply executives nationwide. The composition of the Manufacturing Business Survey Committee is stratified according to the North American Industry Classification System (NAICS) and each of the following NAICS-based industries' contribution to gross domestic product (GDP): Food, Beverage & Tobacco Products; Textile Mills; Apparel, Leather & Allied Products; Wood Products; Paper Products; Printing & Related Support Activities; Petroleum & Coal Products; Chemical Products; Plastics & Rubber Products; Nonmetallic Mineral Products; Primary Metals; Fabricated Metal Products; Machinery; Computer & Electronic Products; Electrical Equipment, Appliances & Components; Transportation Equipment; Furniture & Related Products; and Miscellaneous Manufacturing (products such as medical equipment and supplies, jewelry, sporting goods, toys and office supplies). The data is weighted based on each industry's contribution to GDP. According to BEA estimates (the average of the fourth quarter 2023 GDP estimate and the GDP estimates for first, second, and third quarter 2024, as released on December 19, 2024), the six largest manufacturing industries are: Chemical Products; Transportation Equipment; Computer & Electronic Products; Food, Beverage & Tobacco Products; Machinery; and Petroleum & Coal Products. Survey responses reflect the change, if any, in the current month compared to the previous month. For nine indicators (New Orders, Backlog of Orders, New Export Orders, Imports, Production, Supplier Deliveries, Inventories, Employment, and Prices), this report shows the percentage reporting each response, the net difference between the number of responses in the positive economic direction (higher, better and slower for Supplier Deliveries) and the negative economic direction (lower, worse and faster for Supplier Deliveries), and the diffusion index. For Customers' Inventories, respondents report their assessment of their customers' stock levels of respondent companies' products this month (rather than last month): too high, about right, and too low. Responses are raw data and are never changed. The diffusion index includes the percent of positive responses plus one-half of those responding the same (considered positive). The resulting single index number for those meeting the criteria for seasonal adjustments (Manufacturing PMI®, New Orders, Production, Employment and Inventories) is then seasonally adjusted to allow for the effects of repetitive intra-year variations resulting primarily from normal differences in weather conditions, various institutional arrangements, and differences attributable to non-moveable holidays. All seasonal adjustment factors are subject annually to relatively minor changes when conditions warrant them. The Manufacturing PMI® is a composite index based on the diffusion indexes of five of the indexes with equal weights: New Orders (seasonally adjusted), Production (seasonally adjusted), Employment (seasonally adjusted), Supplier Deliveries, and Inventories (seasonally adjusted). Diffusion indexes have the properties of leading indicators and are convenient summary measures showing the prevailing direction of change and the scope of change. A Manufacturing PMI® reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally declining. A Manufacturing PMI® above 42.3 percent, over a period of time, indicates that the overall economy, or gross domestic product (GDP), is generally expanding; below 42.3 percent, it is generally declining. The distance from 50 percent or 42.3 percent is indicative of the extent of the expansion or decline. With some of the indicators within this report, ISM® has indicated the departure point between expansion and decline of comparable government series, as determined by regression analysis. For the Customers' Inventories Index, numerically, a reading: above 50 percent is 'too high,' equal to 50 percent is 'about right,' and below 50 percent is 'too low.' However, in practice and in the context of other data, customers' inventories may be considered to be 'about right' if the diffusion index is between 52 percent (the high side of about right) and 48 percent (the low side of about right). The Manufacturing ISM® Report On Business® survey is sent out to Manufacturing Business Survey Committee respondents the first part of each month. Respondents are asked to report on information for the current month for U.S. operations only. ISM® receives survey responses throughout most of any given month, with the majority of respondents generally waiting until late in the month to submit responses to give the most accurate picture of current business activity. ISM® then compiles the report for release on the first business day of the following month. The industries reporting growth, as indicated in the Manufacturing ISM® Report On Business® monthly report, are listed in the order of most growth to least growth. For the industries reporting contraction or decreases, those are listed in the order of the highest level of contraction/decrease to the least level of contraction/decrease. Responses to Buying Policy reflect the percent reporting the current month's lead time, the approximate weighted number of days ahead for which commitments are made for Capital Expenditures; Production Materials; and Maintenance, Repair and Operating (MRO) Supplies, expressed as hand-to-mouth (five days), 30 days, 60 days, 90 days, six months (180 days), a year or more (360 days), and the weighted average number of days. These responses are raw data, never revised, and not seasonally adjusted. ISM ROB ContentThe Institute for Supply Management® ('ISM') Report On Business® (both Manufacturing and Non-Manufacturing) ('ISM ROB') contains information, text, files, images, video, sounds, musical works, works of authorship, applications, and any other materials or content (collectively, 'Content') of ISM ('ISM ROB Content'). ISM ROB Content is protected by copyright, trademark, trade secret, and other laws, and as between you and ISM, ISM owns and retains all rights in the ISM ROB Content. 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About Institute for Supply Management® (ISM®) Institute for Supply Management® (ISM®) is the first and leading not-for-profit professional supply management organization worldwide. Its community of more than 50,000 in more than 100 countries around the world manage about US$1 trillion in corporate and government supply chain procurement annually. Founded in 1915 by practitioners, ISM is committed to advancing the strategy and practice of integrated, end-to-end supply chain management through leading edge data-driven resources, community, and education to empower individuals, create organizational value and to drive competitive advantage. ISM's vision is to foster a prosperous, sustainable world. ISM empowers and leads the profession through the ISM® Report On Business®, its highly regarded certification and training programs, corporate services, events and assessments. 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Free Malaysia Today
02-08-2025
- Business
- Free Malaysia Today
US factory activity lowest in 9 months with sluggish demand
US manufacturing activity contracted for a fifth consecutive month in July. (EPA Images pic) WASHINGTON : US manufacturing activity contracted for a fifth consecutive month in July, survey data showed Friday, logging its lowest reading in nine months amid tepid demand and cautious hiring. The Institute for Supply Management's (ISM) manufacturing index came in at 48% last month, down from 49% in June and remaining below the 50% reading that would indicate the sector is expanding. Declines in the supplier deliveries and employment indexes were the biggest factors behind the drop, ISM survey chair Susan Spence said in the report. The index for new orders contracted at a slower rate, while there were quicker supplier deliveries 'as supply chain performance improved and sluggish demand continued', the report said. 'The employment index dropped further into contraction as panelists indicated that managing head count is still the norm at their companies, as opposed to hiring,' it added. A respondent in the apparel sector said: 'These tariff wars are beginning to wear us out. It's been very difficult to forecast what we will pay in duties and calculate any cost savings we've had this year.' Another respondent, in the machinery industry, said: 'Currently, higher interest rates still depress the construction industry for new construction projects.'
Yahoo
01-07-2025
- Business
- Yahoo
US manufacturing activity improved in June, but sentiment remains low
This story was originally published on Manufacturing Dive. To receive daily news and insights, subscribe to our free daily Manufacturing Dive newsletter. Stronger production and inventory activity drove an improvement in U.S. manufacturing performance last month despite weaker demand, tariff uncertainty and inflation continuing to weigh on companies, according to the Institute for Supply Management's June Purchasing Managers' Index. The ISM's index registered 49% in June, up 0.5 percentage points compared to the month prior. A PMI reading below 50% indicates the industry is in contraction. Production recovered to 50.3% after four months of contraction, rising 4.9 percentage points from May. Additionally, inventories improved to 49.2%, up 2.5 percentage points from the previous month following a cargo surge ahead of the expected return of the Trump administration's country-specific reciprocal tariffs in July. As supplier deliveries slowed, there was improved performance clearing goods through ports of entry, the report said. Despite overall manufacturing activity improvement in June, demand remains weak in the face of trade uncertainty and increased prices, Susan Spence, chair of the institute's Manufacturing Business Survey Committee, said on a call Tuesday morning. 'The biggest issue on our panelists' minds continues to be the effect of tariffs on their supply chain and their cost structure,' Spence said. Demand indicators such as new orders, backlog orders and new export orders continued to decline month over month in June as prices increased, according to the index report. Meanwhile, employment remained in contraction mode for the fifth-straight month as layoffs plague the sector. In terms of overall sentiment, for every positive comment from survey participants in last month's report, 11 were negative, Spence said. That is up significantly from last month, when the ratio was about one to five, she added. 'We feel the fatigue continues with the tariff and whiplash uncertainty that we have,' Spence said. Comparatively, S&P Global's U.S. manufacturing index was more upbeat at 52.9%, its highest reading since May 2022. Upturns in output and sustained orders spurred employment growth and improved sentiment, per Chris Williamson, chief business economist at S&P Global Market Intelligence. However, tariffs and inflation continue to lead manufacturers to pass increased costs on to customers. 'The big question of course is whether this merely results in a short-term change in the price level rather than a more worrying return of stubborn inflation,' Williamson said in prepared comments. Business confidence has improved since a low point in April, Williamson said, but he added that 'many firms remain cautious as they await news of trade deals as the deadline for paused tariffs draws closer.' Recommended Reading Manufacturing continues to stall as the industry grapples with tariff uncertainty: PMI Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
01-07-2025
- Business
- Yahoo
FTSE 100 advances and outperforms European peers
London's FTSE 100 ended an up and down trading session firmly in the green on Tuesday despite ongoing US trade policy uncertainty and mixed economic data. The FTSE 100 index closed up 24.37 points, 0.3%, at 8,785.33. The FTSE 250 was 116.90 points higher, 0.5%, at 21,743.16, while the Aim All-Share added 2.29 points, 0.3%, at 772.94. In European equities on Tuesday, the CAC 40 in Paris ended flat, while the DAX 40 in Frankfurt declined 1.0%. Eurozone consumer price inflation accelerated in June, on robust service prices and a lesser decline in energy prices, numbers showed. According to a Eurostat estimate, the pace of consumer price inflation in the single currency area accelerated to 2.0% last month, from 1.9% in May. The reading was in line with the FXStreet-cited consensus. The European Central Bank has a 2% inflation target. Consumer prices rose 0.3% in June from May. They had been flat in May from April. ING said: 'The slight increase in inflation in June is not going to cause much excitement for anyone. It's strange to say in a global economy experiencing huge uncertainty, but eurozone inflation has become delightfully dull again.' In New York, markets were mixed. The Dow Jones Industrial Average was up 0.9%, the S&P 500 was 0.2% lower and the Nasdaq Composite was down 0.9%. The yield on the US 10-year Treasury was quoted at 4.26% narrowed from 4.27% on Monday. The yield on the US 30-year Treasury was quoted at 4.79%, slimmed from 4.82% on Monday. The US manufacturing sector grappled with accelerating price pressure last month, a pair of surveys showed. However, the surveys differed in their assessments of the strength in US manufacturing. The S&P Global US manufacturing purchasing managers' index rose to 52.9 points in June, from 52.0 in May. The reading topped the flash result, which estimated another 52.0 PMI score. The final reading suggests growth has picked up, as the PMI has risen further above the 50 point neutral mark. 'However, tariffs remained a prevalent theme, notably affecting purchasing decisions and prices,' S&P said. By the Institute for Supply Management survey measure, the manufacturing sector remained in decline, though it edged closer to growth. The PMI rose to 49 points in June, still below the no change mark, from 48.5 in May. 'In June, US manufacturing activity slowed its rate of contraction, with improvements in inventories and production the biggest factors,' ISM analyst Susan Spence commented. The ISM prices index remained in expansion territory, rising to 69.7 points in June from 69.4 in May. 'A rebound in production and a slower drawdown in inventories resulted in a more modest pace of contraction for ISM manufacturing in June. But worries about tariffs continue to crimp supply, leaving manufacturers fraught with trade-offs for holding inventory as pricing pressure builds,' said Wells Fargo. Separate data showed US job openings unexpectedly rose in May to the highest level since November. According to Bureau of Labour Statistics data, available positions increased to 7.77 million from a revised 7.40 million reading in April, confounding FXStreet consensus which predicted a drop to 7.3 million. Sam Tombs at Pantheon Macroeconomics said the jump in total job postings is 'irreconcilable' with a broad range of other evidence showing waning appetite among businesses to hire more workers. He thinks the outlook likely remains for slowing growth in both wages and payrolls in the second half of this year. The pound was quoted slightly higher at 1.3705 dollars at the time of the London equities close on Tuesday, compared to 1.3701 dollars on Monday. The euro stood at 1.1770 dollars, higher against 1.1747 dollars. Against the yen, the dollar was trading lower at 143.62 yen compared to 144.31 yen. US President Donald Trump's top trade officials are scaling back their ambitions for comprehensive reciprocal deals with foreign countries, seeking narrower agreements to avert the looming reimposition of US tariffs, the Financial Times reported. The narrower, piecemeal plan for new deals marks a retreat from the White House's vow to strike 90 trade deals during the 90-day pause in the sweeping reciprocal tariffs the president announced on April 2, the FT added. Mr Trump suggested on his Truth Social account that Japan would be sent a new tariff rate, despite weeks of trade negotiations between them. 'To show people how spoiled Countries have become with respect to the United States of America, and I have great respect for Japan, they won't take our RICE, and yet they have a massive rice shortage,' Mr Trump wrote. 'In other words, we'll just be sending them a letter, and we love having them as a Trading Partner for many years to come.' Kathleen Brooks at XRB said: 'Donald Trump threatened to increase tariffs saying that Japan remained unwilling to accept US rice exports. This is a sign that the US president is willing to play hardball with trading partners, even though we are days away from the 9th July deadline to reach agreements. So far, there are no signs that Japan will cave in to the US demands.' Elsewhere, leading central bankers spoke at the European Central Bank's conference in Sintra, broadly restating well-rehearsed playbooks. Bank of England Governor Andrew Bailey reiterated his view that the direction of UK interest rates will likely continue to be downwards, while ECB president Christine Lagardere repeated her mantra of data dependency. For his part, Federal Reserve chairman Jerome Powell kept his options open. 'I wouldn't take any meeting off the table or put it directly on the table,' he said when asked about the prospects of a July rate cut. On the FTSE 100, Sainsbury fell 1.1% despite strong first quarter sales figures, although this wasn't enough for the grocer to raise guidance. Retail sales, excluding fuel, grew by 4.9% year-on-year in the 16 weeks to June 21 ahead of company-compiled consensus of 3.6% annual growth. Excluding fuel, like-for-like sales rose 4.7% year-on-year versus consensus of 3.4%. Dan Coatsworth at AJ Bell said: 'After years of being too expensive for lower-income households and not posh enough to woo wealthier individuals from Waitrose, it's clear Sainsbury's has finally found its groove. Its latest trading update shows a business in fine health, with robust sales growth across the board.' Elsewhere, Kitwave plunged 22% as it warned lower sales and higher employment costs would mean lower than expected profit in the coming financial year. The North Shields, England-based food wholesaler said volatility in the macroeconomic backdrop has caused a 'more pronounced fragility' in consumer confidence hitting volumes in the leisure sector. Elsewhere, Mpac Group slumped 28% as it warned full-year revenue will fall significantly below previous expectations due to slower market conditions in the US. The Tadcaster, North Yorkshire-based high-speed packaging and automation solutions firm said original equipment order intake in its core business slowed materially through the second quarter, as customers responded to growing uncertainty around tariffs and low consumer confidence by deferring capital investments and cutting back on spending. Brent oil was quoted higher at 66.97 dollars a barrel late on Tuesday afternoon in London from 66.42 dollars late Monday. Gold fetched 3,341.97 dollars an ounce, higher against 3,286.04 dollars. The biggest risers on the FTSE 100 were Diageo, up 68.5p, at 1,896.5p, Whitbread, up 95.0p at 2,918.0p, JD Sports Fashion, up 2.56p at 91.3p, Endeavour Mining, up 64.0p at 2,292.0p, and AstraZeneca, up 282.0p at 10,402.0p. The biggest fallers on the FTSE 100 were ConvaTec, down 16.4p at 272.0p, Rolls-Royce, down 28.0p at 939.6p, Babcock International, down 29.0p at 1,119.0p, Barclays, down 7.6p at 329.7p and Standard Chartered, down 25.0p at 1,182.0p. Wednesday's economic calendar has eurozone unemployment figures and ADP private payrolls figures in the US. On the UK corporate front, Topps Tiles is due to release a trading statement. – Contributed by Alliance News
Yahoo
03-06-2025
- Business
- Yahoo
Stocks brave tariff-induced volatility to swing higher
Stock indexes closed higher on Monday despite uncertain economic news as Trump's tariffs continue to be fought over in court. After posting their strongest month since 2023 in May, stocks started off June on a strong foot. Indexes opened in the red but closed higher Monday, powering through a poor manufacturing report and ongoing uncertainty over U.S. trade negotiations. The S&P 500 closed 0.3% higher. The Dow gained 0.08% and the Nasdaq gained 0.7%. Nvidia gained 2.2% and Meta rose 3.6%, helping pull the overall index higher. According to the Institute for Supply Management's manufacturing report this morning, the sector contracted for the third month in a row, with new orders, backlogs, production, and employment all shrinking. Respondents to the ISM's monthly survey overwhelmingly cited uncertainty about tariffs and higher input costs as challenges. 'In May, U.S. manufacturing activity slipped further into contraction after expanding only marginally in February,' Susan Spence, chair of the ISM's Manufacturing Business Survey Committee, said in a statement. She added that deliveries were delayed because of additional processing time at ports and because 'suppliers and panelists' companies are haggling over who pays for applied tariffs.' Last week, an appeals court permitted the Trump administration's tariffs to stay in place while lawsuits on their legality proceed, potentially going all the way up to the Supreme Court. However, even if the current 'reciprocal' tariffs are ruled illegal, analysts note, the White House has several legal options to pursue its tariff policies. 'Either way, tariff rates are likely to get back over 10% and stay there, one way or another,' researchers at LPL Financial said in a note. 'Trade negotiations will continue, economic growth and deficit concerns will remain, and markets are likely to continue to be volatile around lingering trade policy uncertainty.' This story was originally featured on Sign in to access your portfolio
