Data released by the Institute for Supply Management (ISM) shows that the US Purchasing Managers Index (PMI) for July climbed for the second month in a row, after a three-month decline, to reach 54.2 (with a reading of 50 or higher indicating growth). It was up 1.6% over June and 5.6% higher than the 12-month average of 48.6.

Thirteen of the 18 manufacturing sectors tracked by ISM showed growth. With five of the top manufacturing sectors expanding, production grew 4.8% from June to 62.1, reaching its highest level since August 2018. New orders indicate that growth will likely continue, as they advanced 5.1% to 61.5 – the highest reading since September 2018. Each of the top six manufacturing sectors recorded gains in new orders. International business also returned to expansion mode.

These numbers mark a considerable improvement over economic indicators of previous months.

The report sees cause for cautious optimism. While e-commerce is expected to continue to grow, the retail and construction sectors as well as manufacturing supply chains could enjoy increased activity in the second half of the year.

However, economic development would likely move in step with the rise or fall of the pandemic, with further spread of the virus set to affect freight volumes.

Source: The Loadstar