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PMI slips as tariffs raise concern for managers

Index falls to 58.1% as demand remains strong, but global trade, employment remain issues.

Bob Vavra, CFE Media
08/01/2018
PMI slips as tariffs raise concern for managers

Courtesy: Bob Vavra, CFE MediaWith the issue of tariffs looming over the manufacturing sector, the Institute for Supply Management's (ISM) monthly purchasing manufacturers' index (PMI) slipped 2.1 percentage points in July to a still-robust 58.1%. While down from the 60.2% level in June, the PMI remains well above growth levels for the year and continues a nearly two-year growth spurt.

"Comments from the panel reflect continued expanding business strength. Demand remains strong, with the New Orders Index at 60% or above for the 15th straight month, and the Customers' Inventories Index remaining low," said Timothy R. Fiore, chairman of the Institute ISM Manufacturing Business Survey Committee.

Fiore noted there was plenty of reason for optimism among manufacturing executives, and a few reasons for concern. "Demand remains robust, but the nation's employment resources and supply chains continue to struggle," Fiore said in a press release. "Respondents are again overwhelmingly concerned about how tariff-related activity, including reciprocal tariffs, will continue to affect their business."

Those concerns were reflected in comments from ISM committee members. Among the comments:

The PMI has been above the 50% growth level for 23 straight months, and the index is averaging a 59.1% reading for the year.

Bob Vavra, content manager, CFE Media, bvavra(at)cfemedia.com.

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