U.S. Manufacturing Expands in June as ISM® PMI® Hits 53.3%

U.S. manufacturing expanded in June for the sixth consecutive month, with the ISM® Manufacturing PMI® registering 53.3%, signaling continued growth despite slightly slower momentum. New orders and production increased, inventories returned to expansion, and supplier deliveries slowed, reflecting steady demand and ongoing supply‑chain adjustments.

Why U.S. Manufacturing Expanded in June

The June ISM® PMI® report shows broad‑based manufacturing growth across multiple industries, even as some subindexes cooled slightly from May.

Key drivers of expansion include:

1. Strong New Orders Activity
   The New Orders Index registered 56%, marking its sixth straight month of growth. Although slightly lower than May, it reflects sustained demand across industrial sectors.
2. Production Growth Continues
   Production increased to 52.2%, indicating manufacturers are increasing output to meet demand, though at a slower pace than the previous month.
3. Inventories Return to Expansion
   The Inventories Index rose to 51.4%, suggesting manufacturers are rebuilding stock levels after months of contraction.
4. Supplier Deliveries Slowed
   Supplier Deliveries registered at 57.4%, indicating slower deliveries, which is typical in an improving economy with rising demand.
5. Prices Remain Elevated
   The Prices Index came in at 73%, still high but down sharply from May’s 82.1%, indicating moderating cost pressures.

What the June PMI® Says About the Broader Economy

The overall economy expanded for the 20th consecutive month, according to ISM®. A PMI® above 47.5% over time indicates economic expansion, and June’s 53.3% reinforces that momentum.

Industries Reporting Growth

Fourteen industries reported growth in June, including:

• Electrical equipment
• Primary metals
• Fabricated metal products
• Machinery
• Computer & electronic products
• Transportation equipment
• Chemicals
• Plastics & rubber
• Food, beverage & tobacco

This breadth of expansion shows strength across both durable and nondurable goods.

Key Subindex Movements and What They Mean

• New Orders — Growing but Slightly Slower
  56%, down 0.8 points from May. Demand remains strong but is moderating.
• Production — Still Growing
  52.2%, down 2.1 points. Manufacturers are producing more, but growth is cooling.
• Employment — Contracting but Improving
  49.7%, up 1.1 points. Hiring remains soft, but contraction is slowing.
• Supplier Deliveries — Slower
  57.4%, down 3.2 points. Slower deliveries typically indicate rising demand.
• Inventories — Back to Expansion
  51.4%, up 1.5 points. Manufacturers are replenishing stock.
• Prices — Still High but Cooling
  73%, down 9.1 points. Cost pressures remain but are easing.

What This Means for U.S. Manufacturers

Short‑Term Outlook

• Continued expansion through the summer
• Moderating demand but stable growth
• Easing price pressures
• Improved inventory positioning

Long‑Term Outlook

• Broad industry participation signals durable growth
• Supply‑chain conditions are improving gradually
• Hiring challenges persist but may stabilize
• Export softness could weigh on future momentum

Key Takeaways

• U.S. manufacturing expanded in June with a PMI® of 53.3%.
• New orders and production grew for the sixth straight month.
• Inventories returned to expansion territory.
• Supplier deliveries slowed, indicating rising demand.
• Prices remain elevated but are cooling.
• Fourteen industries reported growth, showing broad‑based strength.

FAQ

• Is U.S. manufacturing growing?
  Yes — June marked the sixth consecutive month of expansion with a PMI® of 53.3%.
• Which areas are driving growth?
  New orders, production, inventories, and supplier deliveries all contributed to expansion.
• Are prices still rising?
  Yes, but at a slower pace, the Price Index fell from 82.1% to 73%.
• Is employment improving?
  Employment remains in contraction but improved slightly to 49.7%.

EXCLUSIVE: ISM Chair’s Susan Spence & Steve Miller on the Supply Chain Planning Forecast – Manufacturing Talk Radio