The following is the un-edited press release from the Institute for Supply Management.


(Tempe, Arizona) — Economic activity in the manufacturing sector expanded in June following four months of contraction, while the overall economy grew for the 80th 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. """"The manufacturing sector showed a slight improvement in June as the PMI registered above 50 percent after four months of decline. While the PMI indicates minimal change is taking place month over month that is hardly the situation. When viewed from the manufacturer''s perspective, they are experiencing higher prices for their inputs while demand for their products is slowing.""""

PERFORMANCE BY INDUSTRY

The nine industries reporting growth in June — listed in order — are: Printing & Related Support Activities; Paper Products; Computer & Electronic Products; Petroleum & Coal Products; Food, Beverage & Tobacco Products; Chemical Products; Primary Metals; Furniture & Related Products; and Fabricated Metal Products. The industries reporting contraction in June are: Wood Products; Electrical Equipment, Appliances & Components; Transportation Equipment; Machinery; Nonmetallic Mineral Products; Apparel, Leather & Allied Products; and Plastics & Rubber Products.

WHAT RESPONDENTS ARE SAYING ...

""""The shock waves from high crude price continue to put pressure on derivative pricing."""" (Chemical Products)
""""Business appears to have bottomed out."""" (Transportation Equipment)
""""Seeing renewed interest in outstanding quotes."""" (Machinery)
""""Volume is normal, and we are able to recover some of the raw material (steel cost) increases."""" (Fabricated Metal Products)
""""Commodity bubble is killing profitability."""" (Food, Beverage & Tobacco Products)
""""Orders have slowed, and prices for metals are going up."""" (Computer & Electronic Products)

COMMODITIES REPORTED UP/DOWN IN PRICE and IN SHORT SUPPLY
Commodities Up in Price

ABS; Acrylics (2); Aluminum (5); Aluminum Extrusions (4); Caustic Soda (4); Chemicals (2); Corn (3); Corrugated Containers (2); Diesel Fuel (4); Electricity; Freight (2); Fuel Oil — #2 (2); Fuel Surcharges (4); Gasoline (3); Natural Gas (8); Petroleum Based Products (2); Plastics; Polypropylene Resins; Resins (3); Soybean Oil (3); Stainless Steel (2); Steel (6); Steel — Alloys, Cold Finished, Hot Rolled, Specialty; Sulfuric Acid (8); and Titanium Dioxide.

Commodities Down in Price

Copper is the only commodity reported down in price.

Commodities in Short Supply

Caustic Soda (4) and Steel (3) are the only commodities reported in short supply.


JUNE 2008 MANUFACTURING INDEX SUMMARIES
PMI

Manufacturing grew in June as the PMI registered 50.2 percent, 0.6 percentage point higher than the 49.6 percent reported in May. 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 41.1 percent, over a period of time, generally indicates an expansion of the overall economy. Therefore, the PMI indicates the overall economy and the manufacturing sector are growing at this time. Ore stated, """"The past relationship between the PMI and the overall economy indicates that the average PMI for January through June (49.3 percent) corresponds to a 2.6 percent increase in real gross domestic product (GDP). In addition, if the PMI for June (50.2 percent) is annualized, it corresponds to a 2.9 percent increase in real GDP annually.""""

New Orders

ISM''s New Orders Index registered 49.6 percent in June, 0.1 percentage point lower than the 49.7 percentage points registered in May. A New Orders Index above 51.6 percent, over time, is generally consistent with an increase in the Census Bureau''s series on manufacturing orders (in constant 2000 dollars).