In what was an earlier than expected report, today’s ISM Manufacturing report for the month of July came in weaker than expected (52.7 vs 53.5), falling from last month’s level of 53.5.  This was the first monthly decline for the ISM Manufacturing report since March and breaks a string of two stronger than expected reports in May and June.

080315ISM Main Chart

Looking at the internals of this month’s report, breadth was relatively weak.  As shown in the table below, just three of the ten components showed m/m increases in July with Production seeing the biggest gain.  On the downside, Prices Paid saw the largest decline falling from 49.5 down to 44.0.  For that component, this was the largest one-month decline since April 2013 and shouldn’t have been too much of a surprise given the weakness in commodities.  On a year/year basis, breadth was even weaker with only two components (Business Inventories and Customer Inventories) showing a y/y increase.  The biggest decliners y/y were Prices Paid (-15.5), Backlog Orders (-7.0), and Supplier Deliveries (-5.4).

080315ISM Table

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