Overdrive Extra

Max Heine

Some bright spots in the supply chain

| July 01, 2009

If you’re looking for good news, this morning’s report from the Institute for Supply Management has some: The overall economy grew in June. Warehouses are emptying out, which is good for trucking.

Manufacturing failed to grow last month, though its rate of contraction is slowing. And seven of 18 industries did report growth to ISM: petroleum and coal products; printing and related support activities; wood products; nonmetallic mineral products; miscellaneous manufacturing; chemical products; and primary metals. 

“Most encouraging is the gain in the Production Index, which is up 12.1 percentage points in the last two months to 52.5 percent,” says ISM’s Norbert J. Ore. “Aggressive inventory reduction continues and indications are that the de-stocking cycle is at or near the end in most industries, as the Customers’ Inventories Index remained below 50 percent for the third consecutive month. The Prices Index was unchanged from May, indicating that the supply/demand balance is improving. Overall, a slow recovery for manufacturing is forming.”

– Max Heine