Manufacturing still growing, but more slowly
The recovery is still with us, note the factory-watchers at the Institute for Supply Management. The manufacturing sector expanded in June for the 11th consecutive month, though at a less heated pace than in May. The overall economy for the 14th consecutive month in June.
Of course, the housing and labor markets still suffer. The first affects flatbed freight, though flatbed seems to have enough other business to have started the year well. First-quarter data from ATBS shows that flatbed haulers’ income was on par with reefers and higher than dry van.
As for jobs, you probably know people who are struggling, but drivers are in demand. And that demand is going to get much stronger. To hear more about that, watch and listen to the one-hour webinar we did last week on “The emerging driver shortage.” You can download the free archived webinar.
Now back to the ISM data. Thirteen manufacturing sectors reported growth in June, in this order: Plastics & Rubber Products; Transportation Equipment; Printing & Related Support Activities; Computer & Electronic Products; Electrical Equipment, Appliances & Components; Paper Products; Fabricated Metal Products; Food, Beverage & Tobacco Products; Furniture & Related Products; Petroleum & Coal Products; Nonmetallic Mineral Products; Miscellaneous Manufacturing; and Chemical Products.
The industries reporting contraction in June were: Apparel, Leather & Allied Products; Wood Products; and Machinery.
ISM measures this with its PMI (Purchasing Managers’ Index). It was 56.2 in June, down from 59.7 in May. A reading above 50 percent indicates an expanding manufacturing economy.
“We are now 11 months into the manufacturing recovery, and given the robust nature of recent growth, it is not surprising that we would see a slower rate of growth,” says Norbert Ore, of ISM’s Manufacturing Business Survey Committee. “Expectations have been that the second half of the year will not be as strong in terms of the rate of growth, and June appears to validate that forecast.”