Economic activity in the key manufacturing
category expanded in June for the 13th consecutive month, albeit the rate of increase, at 55.3, was a tad below the May figure of 55.4
and the forecast of 55.8. Still, this metric was comfortably above the dividing line between an expanding manufacturing sector and one that is contracting. That dividing line is 50.0.
Also, this was the 61st month in succession that the economy grew according to the nation's supply executives in the most recent manufacturing report, although the first quarter's 2.9% plunge in GDP
(gross domestic product
) brings that assessment into some question.
Within this aggregate category, meanwhile, we saw new orders rise from May's 56.9 reading to 58.9. However, most components just held their ground last month, or grew at a slightly lesser pace. Included here were production, employment, supplier deliveries, prices, and inventories.
As for the overall showing, the 55.3 reading was the second highest of 2014; it also compared favorably with the average reading during the past 12 months of 55.1. The range through this extended period has been 51.3 to 57.0. That interim peak was reached last November.
Meanwhile, of the 18 manufacturing industries surveyed, 15 reported growth, led by furniture and related products, nonmetallic mineral products, and food, beverage, and tobacco products. Three industries noted some contraction, led by the nation's textile mills.
Among respondents in this survey, in the food area, one of the better performing industries, we heard that business volume was increasing at a good pace, as consumers appear to be spending more. In transportation equipment, the purchasing managers noted that business is still very solid and strong, while upbeat comments were heard in primary metals and computer and electronic products.
All in all, this was a solid report and one that gives us confidence that the economy will perform reasonably well during the third and fourth quarters of this year and into 2015.At the time of this article's writing, the author did not have positions in any of the companies mentioned.