Manufacturing growth remained steady in June, according to an Institute for Supply Management report released Tuesday.
After May's index reading clocked in at 55.4%, June's index came in just a bit lower, at 55.3%. Based on surveys of purchasing managers, a reading above 50% indicates that the manufacturing economy is generally expanding, while below 50% indicates that it is generally contracting.
Market analysts weren't elated by the overall index number, having expected a slightly higher 55.6%.
However, digging into the report, there are some important signs of growth ahead. On a component-by-component basis, the all-important new orders came in two points higher to reach a solid 58.9%. Employment remained in steady growth territory at 52.8%, while production dropped 1 percentage point to notch a respectable 60%. While new orders is a bright spot on June's report, order backlogs headed back into the red, dropping from 52.5% in May to 48% for June.
Fifteen of the 18 industries surveyed reported growth for June, with furniture taking the cake for the biggest improvement. On the other end of the spectrum, textile mills, chemical products, and plastics & rubber products all reported contraction in June.