U.S. Paper, Wood Products Show Growth in July

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The New Orders Index increased in July by 6.4 percentage points to 58.3%, and the Production Index increased by 11.6 percentage points to 65%. The Employment Index registered 54.4%, an increase of 5.7 percentage points compared with June's reading of 48.7%. The Prices Index registered 49%, decreasing 3.5 percentage points from June, indicating that overall raw materials prices decreased from last month. Comments from the panel generally indicate stable demand and slowly improving business conditions.

Of the 18 manufacturing industries, 13 are reporting growth in July in the following order: Furniture & Related Products; Textile Mills; Printing & Related Support Activities; Paper Products; Wood Products; Nonmetallic Mineral Products; Electrical Equipment, Appliances & Components; Computer & Electronic Products; Food, Beverage & Tobacco Products; Primary Metals; Transportation Equipment; Chemical Products; and Fabricated Metal Products. The four industries reporting contraction in July are: Plastics & Rubber Products; Apparel, Leather & Allied Products; Machinery; and Miscellaneous Manufacturing.

The nine industries reporting growth in new orders in July (in order) are: Textile Mills; Printing & Related Support Activities; Nonmetallic Mineral Products; Furniture & Related Products; Paper Products; Electrical Equipment, Appliances & Components; Food, Beverage & Tobacco Products; Computer & Electronic Products; and Fabricated Metal Products. The five industries reporting a decrease in new orders during July are: Machinery; Plastics & Rubber Products; Primary Metals; Petroleum & Coal Products; and Miscellaneous Manufacturing.

ISM's Production Index registered 65% in July, which is an increase of 11.6 percentage points when compared with the 53.4% reported in June. This month's reading indicates growth in production for the second consecutive month, and is the highest reading since May 2004, when the index registered 65.3%. An index above 51.2%, over time, is generally consistent with an increase in the Federal Reserve Board's Industrial Production figures.

The 13 industries reporting growth in production during the month of July (in order) are: Textile Mills; Paper Products; Wood Products; Printing & Related Support Activities; Nonmetallic Mineral Products; Furniture & Related Products; Petroleum & Coal Products; Computer & Electronic Products; Miscellaneous Manufacturing; Food, Beverage & Tobacco Products; Primary Metals; Electrical Equipment, Appliances & Components; and Fabricated Metal Products. The two industries reporting a decrease in production in July are Chemical Products and Machinery.

ISM's Employment Index registered 54.4% in July, which is 5.7 percentage points higher than the 48.7% reported in June. This month's reading indicates a return to expansion in employment, following only two months of contraction in the past 47 months. An Employment Index above 50.5%, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) data on manufacturing employment.

Of the 18 manufacturing industries, nine reported growth in employment in July in the following order: Furniture & Related Products; Wood Products; Printing & Related Support Activities; Electrical Equipment, Appliances & Components; Food, Beverage & Tobacco Products; Primary Metals; Fabricated Metal Products; Paper Products; and Machinery. The four industries reporting a decrease in employment in July are: Apparel, Leather & Allied Products; Chemical Products; Transportation Equipment; and Computer & Electronic Products.

The Inventories Index registered 47% in July, which is 3.5 percentage points lower than the 50.5% reported in June. This month's reading indicates that respondents are reporting inventories contracted in July, following one month of growth. For the first seven months of 2013, inventories of raw materials have registered in a well-managed range from a high of 51.5% in February to a low of 46.5% in April. An Inventories Index greater than 42.7%, over time, is generally consistent with expansion in the Bureau of Economic Analysis' (BEA) figures on overall manufacturing inventories (in chained 2000 dollars).

The five industries reporting higher inventories in July are: Transportation Equipment; Paper Products; Furniture & Related Products; Chemical Products; and Computer & Electronic Products. The seven industries reporting decreases in inventories in July (in order) are: Plastics & Rubber Products; Miscellaneous Manufacturing; Machinery; Fabricated Metal Products; Electrical Equipment, Appliances & Components; Petroleum & Coal Products; and Food, Beverage & Tobacco Products. Six industries reported no change in inventories in July compared to June.

The ISM Customers' Inventories Index registered 47.5% in July, which is 2.5 percentage points higher than in June when the index registered 45%. This month's reading indicates that customers' inventories are considered too low, but higher than reported in June. Customers' inventories have registered at or below 50% for 52 consecutive months. A reading below 50% indicates customers' inventories are considered too low.

The five manufacturing industries reporting customers' inventories as being too high during the month of July are: Apparel, Leather & Allied Products; Petroleum & Coal Products; Miscellaneous Manufacturing; Chemical Products; and Fabricated Metal Products. The nine industries reporting customers' inventories as too low during July (in order) are: Plastics & Rubber Products; Textile Mills; Nonmetallic Mineral Products; Electrical Equipment, Appliances & Components; Transportation Equipment; Furniture & Related Products; Paper Products; Food, Beverage & Tobacco Products; and Computer & Electronic Products.

The full text version of the Manufacturing ISM Report on Business is available online.