Industrial Growth | Second Quarter 2015

August 2015 – During much of Q2 2015, the industrial sector has shown sluggish to no growth across several indices as the ISM Manufacturing Index for July came in at 52.7 and well below consensus, and July’s PMI Manufacturing Index was in line with estimates at 53.8. Key drivers in these reports include: weak employment among manufacturers, continued contraction in exports as new export orders fell for the fifth contractionary reading in the last seven months, and backlogs dropped by 4.5 points representing the sharpest decline in three years. Despite these negative trends, there are some positive elements in the current manufacturing environment. Specifically, production was strong at 56.0 and new orders rose by 0.5 points to the strongest reading of the year, suggesting that domestic demand is improving. Positive trends in domestic demand should help alleviate, but not offset…

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