US: ISM manufacturing index jumps to 57.8 in June - Nomura

The US ISM manufacturing index improved to 57.8 in June from 54.9 in May, above expectations (Nomura: 55.0, Consensus: 55.2), with broad-based strength in sub-indexes, notes the research team at Nomura.

Key quotes

“Report suggests manufacturing activity expanded at a solid pace. Both production and new orders indexes showed improvement increasing 5.3pp to 62.4 and 4.0pp to 63.5, respectively. The backlog of orders index increased slightly to 57.0 from 55.0 while inventories decreased to 49.0, implying that demand picked up and this momentum may continue in the near term. Moreover, the new export orders index improved 2.0pp to 59.5, indicating that international demand remains upbeat.”

“The uptick in this indicator appears consistent with recent improvement in goods exports. In addition, the employment index increased to 57.2 from 53.5, suggesting healthy hiring activity in the sector. The prices paid index eased to 55.0 from 60.5 indicating that raw material prices increased at a slower rate in June than in May. ISM reported price relief in basic commodities such as natural gas, distillates, oil, plastics, and steel, while finished items of these materials are showing some price growth. Overall, today’s report indicates continued health in the manufacturing sector.”