Regarding the Institute for Supply Management’s June report on manufacturing: Today’s report indicates that the manufacturing recession could end sometime in the second half of the year.
The fact that the overall PMI index improved for a sixth consecutive month in June is significant. After bottoming out at 32.9 last December, the PMI Index rose to a level of 44.8 in June, still shy of the break-even point of 50, which signals that the manufacturing sector is expanding.
And while it has yet to break into positive territory, positive developments, especially over the past few months, mirror similar improvements in other regional surveys of manufacturing activity throughout the second quarter.
The fact that the ISM’s measure of manufacturing production rose into positive territory in June for the first time since last August is noteworthy. And, while there have been significant improvements in both overall orders, as well as export orders, over the first half of the year, the fact that both continued to contract last month signals that a general upturn in manufacturing activity in the second half will likely be gradual.