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ISM Rated American Manufacturing Above 60 for June

If you keep up with the news, you’re probably well aware of the positive advancements in the U.S. economy in recent months. Even amidst fears of a trade war, the country’s gross domestic product (GDP) and job market remains strong. Part of the reason for its newfound success is substantial growth in the manufacturing sector. According to the Institute of Supply Management’s (ISM’s) latest report, the American manufacturing industry was rated at 60.2 in June. To put that number into perspective, it was rated at 58.7 the month prior.

When speaking about the new report, a spokesperson for ISM explained that industrial factories are experiencing strong demand. And with this increased demand comes more sales, thereby strengthening the manufacturing industry and improving the U.S. economy in the process. On the other hand, however, there are concerns among manufacturers regarding newly placed tariffs and supply-chain challenges.

Even with tariffs and supply-chain struggles in the manufacturing sector, though, the U.S. economy is stronger and healthier than ever. A report published by Macroeconomic Advisers projected that the country’s GDP grew by 4.8%, while GDPNow researchers projected a growth of 4.1%. In the first quarter of 2018, the country’s GDP grew by just 2%.

That’s not the only good news about the U.S. economy. According to the Bureau of Labor Statistics (BLS), the country’s unemployment rate dropped to just 3.8% in May — the lowest unemployment rate in more than 18 years.

ISM’s Time Fiore attributed to the U.S. economy’s strong growth to several factors, but he cautioned that tariffs may restrict the amount of raw supplies that U.S. manufacturers are able to acquire. And if they can’t acquire raw supplies, they may struggle to produce goods and fulfill orders.

There’s an extreme amount of activity going on to account for impacts that are driven by the aluminum and steel tariffs, and that is expanding out to other industries,” said ISM’s Tim Fiore. “When suppliers are delivering, manufacturers are pretty much using those supplies right away,” Mr. Fiore said. “At what point does that affect output because you don’t have enough raw materials to satisfy your production?

All in all, the U.S. economy and manufacturing industry is on the right track. Reports show strong growth in the manufacturing sector, which is reflected by the country’s GDP and low unemployment rate. Whether this trend continues remains to be seen. Currently, though, most hardworking Americans will agree that it’s a step in the right direction, paving the way to a brighter future.

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