Conditions for US manufacturers continued to improve in July, according to a report issued by the Institute for Supply Management this week.
The July level of ISM's index, which measures national factory output, was 48.9 percent, its strongest since August 2008 and up from 44.8 percent in June. Readings below 50, however, indicate contraction. The index was last at 50 percent in January 2008, and hit a 28-year low of 32.9 percent in December.
Notable data in the ISM's report for July were that production and new orders rose to their highest level in two years, while new export orders started to grow again after declining for nine months. The ISM said that US manufacturing activity should move into solid expansion (over 50 percent) next month.
In another sign that the US recession may be moderating, the US Department of Commerce also reported this week that US construction spending rose 0.3 percent in June, after dropping 0.8 percent in May.
Despite the mostly positive July manufacturing data, the Fabricators & Manufacturers Association International (FMA) reported Tuesday that its economic analyst believes that the Obama administration needs to do more to support US manufacturers. “For the most part, actions taken by the White House have been long on rhetoric and very short on pragmatic help,” says Dr. Chris Kuehl, economic analyst for the FMA. The manufacturing trade group wants to see changes in the President's policies in the areas of exports, health care, unions, and the use of stimulus money.