American manufacturing industries resumed growth in June after a one month dip into contraction with new orders and production returning to expansion.
The index of factory activity rose to 50.9, a three-month high, up from 49.0 in May according to the Institute for Supply Management (ISM) in Tempe, Arizona. May's reading had been the lowest in four years. Analysts had forecast a score of 50.5.
Index scores above 50 indicate sector expansion and those below 50 contraction. Manufacturing is seen by many economists as a leading indicator for the economy as a whole due to the longer lead and planning times involved in increasing or decreasing production.
New orders climbed to 51.9 in June from 48.8. May had been the first negative month for this forward looking sub-index since December. Export orders rose to 54.5 in June from 51.0, import orders gained 56.0 from 54.5. Production jumped above the 50 division at 53.4 from 48.6 in May. Factory employment sank to 48.7 from 50.1. It was the lowest employment level since September 2009.
Chief Market Strategist