Overdrive Extra

Max Heine

Reports good for factory freight

| July 02, 2011

You might have heard that the stock market just logged its best weekly gain in two years. One major reason was good manufacturing news, including the monthly factory report from the Institute for Supply Management, which came out Friday. Considering that the recovery has shown some slippage in recent weeks, this is encouraging news for freight.

The ISM report also measures inventories, which rose from May to June. Still, “This is the 27th consecutive month the Customers’ Inventories Index has been below 50 percent, indicating that respondents believe their customers’ inventories are too low at this time.” This, too, bodes well for freight.

ISM’s Purchasing Managers Index for June “registered 55.3 percent, an increase of 1.8 percentage points from May, indicating expansion in the manufacturing sector for the 23rd consecutive month,” says Bradley J. Holcomb of ISM. “New orders and production were both modestly up from last month, and employment showed continued strength with an increase of 1.7 percentage points to 59.9 percent.”

The growth areas seem to cover many areas of hauling, though there was no change regarding the housing slump. In fact, one of the five sectors that contracted was Wood Products. The others were Plastics & Rubber Products; Apparel, Leather & Allied Products; Primary Metals; and Food, Beverage & Tobacco Products.

Twelve areas reported growth in June, in the following order: Miscellaneous Manufacturing; Printing & Related Support Activities; Computer & Electronic Products; Paper Products; Textile Mills; Petroleum & Coal Products; Nonmetallic Mineral Products; Transportation Equipment; Chemical Products; Fabricated Metal Products; Machinery; and Electrical Equipment, Appliances & Components.