Wednesday, August 1, 2012

It is ISM day-

Another negative print on the ISM.....

MANUFACTURING AT A GLANCE
JULY 2012


Index
Series
Index
Jul
Series
Index
Jun
Percentage
Point
Change


Direction
Rate
of
Change

Trend*
(Months)
PMI 49.8 49.7 +0.1 Contracting Slower 2
New Orders 48.0 47.8 +0.2 Contracting Slower 2
Production 51.3 51.0 +0.3 Growing Faster 38
Employment 52.0 56.6 -4.6 Growing Slower 34
Supplier Deliveries 48.7 48.9 -0.2 Faster Faster 6
Inventories 49.0 44.0 +5.0 Contracting Slower 4
Customers' Inventories 49.5 48.5 +1.0 Too Low Slower 8
Prices 39.5 37.0 +2.5 Decreasing Slower 3
Backlog of Orders 43.0 44.5 -1.5 Contracting Faster 4
Exports 46.5 47.5 -1.0 Contracting Faster 2
Imports 50.5 53.5 -3.0 Growing Slower 8
             
OVERALL ECONOMY Growing Faster 38
Manufacturing Sector Contracting Slower 2

... and it is likely to stay that way. Although the PMI was essentially flat, as slightly higher new orders and production measures offset declines in employment, other and more forward looking measures look weak. The inventories measures suggests a contraction in inventories (which is a positive). However, the decline is slowing, and inventories may increase in future periods without slower production rates and/or an increase in new orders. Ominously, the order backlogs declined again to 43, suggesting a slow down in future production absent of a bump in new orders. As the latter is concerned, the customer inventories index ticked up to 49.5. This measure typically runs inverse to new orders and suggests weak new order prints in future periods. In addition, the exports figure declined once again, obviously showing the weakness in the world economy.

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