US DATA: Analysts Still Optimistic About Mfg Growth After ISM

By Holly Stokes

     WASHINGTON (MNI) - ISM July manufacturing index dipped slightly to 56.3

following June's sharp rise to 57.8, as expected, but analysts remained

optimistic on manufacturing growth for the near future.

     Analysts noted that July's manufacturing index was still well above the

51.5 and 51.4 averages in 2016 and 2015, respectively and that while new orders,

employment, and production faced mild declines from their June levels, the

indexes remained strong. 

     Capital Economics pointed out that readings for production and new orders

remained above 60, indicating acceleration for manufacturing output in the

months to come. Additionally, analysts such as NatWest stated that the

employment index points to a stronger growth in factory payrolls for this Friday

after soft payrolls readings in the previous two months.

     In relation to the uptick in prices paid index to 62.0 from 55.0, ISM

Survey Chief Tim Fiore stated that the increase was largely driven by steel and

aluminum. He also emphasized that the slowdown in supplier delivery index to

55.4 from 57.0 was actually a positive sign for the economy - stating that

survey responses indicated it was due to transportation delays from heightened

activity. 

     Even with the July ISM indexes showing moderate growth, analysts emphasized

that they still forecast growth for Q3 GDP above 2%.

--MNI Washington Bureau; +1 202-371-2121; email: holly.stokes@marketnews.com

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