A report from
the Institute for Supply Management (ISM) showed on Monday the U.S.
manufacturing sector’s activity shrank in June at a marginally quicker
pace than in the previous month.
The ISM's index
of manufacturing activity - the manufacturing PMI - checked in at 48.5 per cent
in June, down 0.2 percentage point from an unrevised May reading of 48.7 per cent.
The June reading indicated that economic activity in the manufacturing sector contracted
for the third straight month and at a slightly steeper pace than in the
previous month.
Economists had forecast
the indicator to increase to 49.1 per cent.
According to
the report, the New Orders Index climbed 3.9 percentage points to 49.3 per cent
last month but remained in contraction territory for the third month. Meanwhile, the
Production Index fell 1.7 percentage points to 48.5 per cent, entering contraction
territory. The Employment Index declined 1.8 percentage
points to 49.3 per cent, indicating
that employment decreased in June after an expansion in May. Elsewhere, the Supplier
Deliveries Index increased 0.9 percentage point to
49.8 per cent, marking the fourth
consecutive month of faster deliveries of suppliers to manufacturing
organizations. The Inventories Index plunged 2.5 percentage points to 45.4 per
cent, suggesting manufacturing inventories contracted
at a quicker rate compared to the previous month. On the price front, the Prices Index dropped 4.9 percentage
points to 52.1 per cent, indicating raw materials prices rose in June for the sixth
month after eight straight months of decreases.