Flash ISM- we were wrong

The June 2012 PMI declined by more than 3 points and fell below 50. Will have to go back and check the historical observances against the current PMI, but it appears the slowing global economy trumped the historical setup. The customer inventories index print of 48.5 is worrisome.

From the Institute of Supply Management

• "Business is still strong, with some nagging question whether it will be sustained." (Machinery)
• "The economy and general business seem to be getting better even though recent data say otherwise." (Fabricated Metal Products)
• "Significant raw materials price correction underway." (Plastics & Rubber Products)
• "Local labor market shows no signs of slowing down. Competition for technical services/skilled craft remains tight." (Petroleum & Coal Products)
• "Overall demand signals from sales forecast are trending down in all regions." (Computer & Electronic Products)
• "Although our shipments are up year over year and from prior month, we can feel some head winds, especially from Europe. We are watching our expenses very tightly and being cautious." (Apparel, Leather & Allied Products)
• "Business continues to exceed forecast in all markets." (Primary Metals)
• "Economy seems to be slowing slightly due to concerns in Europe; however, production has not changed a great deal." (Transportation Equipment)
• "Business has started to show signs of slowing." (Furniture & Related Products)
• "Slowing world economies, particularly China, are reducing 3Q and later orders and drastically dropping some raw material prices." (Chemical Products)

MANUFACTURING AT A GLANCE JUNE 2012
Index	Series Index Jun	Series Index May	Percentage Point Change	Direction	Rate of Change	Trend* (Months)
PMI	49.7	53.5	-3.8	Contracting	From Growing	1
New Orders	47.8	60.1	-12.3	Contracting	From Growing	1
Production	51.0	55.6	-4.6	Growing	Slower	37
Employment	56.6	56.9	-0.3	Growing	Slower	33
Supplier Deliveries	48.9	48.7	+0.2	Faster	Slower	5
Inventories	44.0	46.0	-2.0	Contracting	Faster	3
Customers' Inventories	48.5	43.5	+5.0	Too Low	Slower	7
Prices	37.0	47.5	-10.5	Decreasing	Faster	2
Backlog of Orders	44.5	47.0	-2.5	Contracting	Faster	3
Exports	47.5	53.5	-6.0	Contracting	From Growing	1
Imports	53.5	53.5	0.0	Growing	Same	7
OVERALL ECONOMY				Growing	Slower	37
Manufacturing Sector				Contracting	From Growing	1