Economic activity in the manufacturing sector expanded in July for the sixth consecutive month, while the overall economy grew for the 69th consecutive month, say the nation''s supply executives in the latest Manufacturing ISM Report On Business®.

The report was issued today by Norbert J. Ore, C.P.M., chair of the Institute for Supply Management™ Manufacturing Business Survey Committee. """"Following a strong second quarter, the manufacturing sector moderated somewhat this past month. In July, manufacturing expanded at its slowest pace in the last four months, but continuing strength in New Orders and Production indicate that third quarter performance should still be quite good. Upward pricing pressures now in their seventh month continue to be a major concern for supply managers.""""

TOP PERFORMING INDUSTRIES

The 10 industries reporting growth in July — listed in order — are: Wood Products; Furniture & Related Products; Food, Beverage & Tobacco Products; Miscellaneous Manufacturing; Paper Products; Textile Mills; Chemical Products; Computer & Electronic Products; Nonmetallic Mineral Products; and Primary Metals.

WHAT RESPONDENTS ARE SAYING ...

""""Price of nickel has finally started the decline to possible normal ranges."""" (Chemical Products)
""""Shortages of electronic components in the military market severely impacting customer deliveries."""" (Computer & Electronic Products)
""""Profit margins shrinking as a result of energy, labor and commodity price increases."""" (Food, Beverage & Tobacco Products)
""""Market going to trough at the moment, but it appears to be near the end."""" (Transportation Equipment)
""""Oil still driving petrochemical prices up."""" (Plastics & Rubber Products)

COMMODITIES REPORTED UP/DOWN IN PRICE and IN SHORT SUPPLY

Commodities Up in Price

Aluminum (8); Caustic Soda; Copper Based Products (4); Low Density Polyethylene; Soybean Oil (2); Stainless Steel (7); and Wheat.

Commodities Down in Price

Gasoline; Natural Gas; Nickel; and Steel — Flat Rolled.

Commodities in Short Supply

No commodities are reported in short supply.

JULY 2007 MANUFACTURING INDEX SUMMARIES
PMI

Manufacturing growth slowed in July as the PMI registered 53.8%, a decrease of 2.2 percentage points when compared to June''s reading of 56%. A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.

A PMI in excess of 41.9 percent, over a period of time, generally indicates an expansion of the overall economy. Therefore, the PMI indicates that both the overall economy and the manufacturing sector are growing. """"The past relationship between the PMI and the overall economy indicates that the PMI average for January through July (53.1 percent) corresponds to a 3.5 percent increase in real gross domestic product (GDP) annually. In addition, if the PMI for July (53.8 percent) is annualized, it corresponds to a 3.7 percent increase in real GDP annually.""""

New Orders

ISM''s New Orders Index declined to 57.5 percent in July. The index is 2.8 percentage points lower than the 60.3 percent reported in June. A New Orders Index above 49.1 percent, over time, is generally consistent with an increase in the Census Bureau''s series on manufacturing orders (in constant 2000 dollars). Nine industries reported increases during July: Wood Products; Furniture & Related Products; Food, Beverage & Tobacco Products; Textile Mills; Miscellaneous Manufacturing; Chemical Products; Machinery; Primary Metals; and Computer & Electronic Products.

Production

ISM''s Production Index registered 55.6 percent in July, which is 7.3 percentage points lower than the 62.9 percent reported in June. July is the sixth consecutive month of production growth for manufacturers. An index above 49.8 percent, over time, is generally consistent with an increase in the Federal Reserve Board''s Industrial Production figures. Of the industries reporting in July, nine registered growth: Wood Products; Paper Products; Furniture & Related Products; Nonmetallic Mineral Products; Food, Beverage & Tobacco Products; Computer & Electronic Products; Primary Metals; Miscellaneous Manufacturing; and Chemical Products.