Eleven industries reported shrinking activity in June, led by plastics and rubber products, wood products, and textile mills. At the same time, recent government data has shown business demand for equipment is still healthy and, if sustained, could provide some support for manufacturers.
The decline in the ISM production gauge, which also fell to the lowest level since May 2020, suggests demand for merchandise remains weak. The index of new orders contracted for a 10th straight month and order backlogs shrank, which may help explain a pullback in a measure of manufacturing employment.
“Demand remains weak, production is slowing due to lack of work, and suppliers have capacity,” Timothy Fiore, chair of the ISM Manufacturing Business Survey Committee, said in a statement. – Bloomberg