US: Focus on ISM Manufacturing Index - RBS

Research Team at RBS, notes that the US ISM manufacturing gauge dipped in July, but the drop was due to a decline in the supplier deliveries component.

Key Quotes

“The new orders measure was nearly unchanged (at a relatively high level) and the production component edged up, while the employment barometer slipped by only a point. Corroborating the strength in manufacturing activity, factory output in the Fed’s industrial production report increased 0.5% in July, with non-auto manufacturing production advancing by 0.4% (the strongest pace since November 2014). In August, manufacturing sector indicators have been less upbeat, signaling some softening in factory activity in the month.

On an ISMadjusted basis, the Philadelphia and Richmond Fed manufacturing indexes fell in August versus July, and the New York and Kansas City Fed surveys were marginally softer as well. Meanwhile, the flash reading of the Markit manufacturing PMI (a national measure, like the ISM) fell from 52.9 in July to 52.1 in August. Consequently, the ISM gauge may have slipped eased in August, suggesting a slight loss of momentum in the factory sector.”