Make us your home page
Instagram

Growth in manufacturing hits lowest level in 2 years

Julaynne Trusel works on a Chevrolet Volt at a General Motors assembly plant in Hamtramck, Mich., last week. A parts shortage stemming from Japan’s March earthquake disrupted automakers’ supply chains, cutting into output of new cars. 

Associated Press

Julaynne Trusel works on a Chevrolet Volt at a General Motors assembly plant in Hamtramck, Mich., last week. A parts shortage stemming from Japan’s March earthquake disrupted automakers’ supply chains, cutting into output of new cars. 

WASHINGTON — Manufacturers had their weakest growth in two years in July, a sign that the economy could weaken this summer. Meanwhile, the Commerce Department said builders began work on more projects in June, pushing construction spending higher for a third straight month.

The Institute for Supply Management, a trade group of purchasing executives, said Monday that its index of manufacturing activity fell to 50.9 percent in July from 55.3 percent in June. The reading was the lowest since July 2009 — one month after the recession officially ended.

Any level above 50 indicates growth. The manufacturing sector has expanded for 23 straight months.

Still, new orders shrank for the first time since the recession ended. Companies slashed their inventories after building them up in June. Output, employment and prices paid by manufacturers all grew more slowly in July.

The disappointing report on manufacturing is the first major reading on how the economy performed in July. It suggests that the dismal economic growth in the first half of the year could extend into the July-September quarter.

"The ISM manufacturing report for July is a shocker and strongly suggests that the disappointing performance of the economy in the first half of the year was not just temporary," said Paul Dales, a senior U.S. economist for Capital Economics.

On a slightly more positive note, construction spending rose 0.2 percent in June to a seasonally adjusted annual rate of $772.3 billion, the government said. But even with the gain, spending remains just slightly above an 11-year low hit in March and is just half of the $1.5 trillion pace considered healthy by most economists.

The factory sector has expanded in every month but one since the recession ended in June 2009, but manufacturing has stumbled in recent months. A parts shortage stemming from Japan's March 11 earthquake disrupted automakers' supply chains, cutting into the output of new cars. And high gas prices left Americans with less money to spend on discretionary items, such as vacations, furniture and appliances.

Employers have responded by pulling back on hiring. The economy added just 18,000 net jobs in June, the fewest in nine months, and the unemployment rate rose to 9.2 percent. Hiring by manufacturers was nearly flat in the April-June period.

Manufacturing represents only about 11 percent of U.S. economic activity and can contribute only so much to the broader economic recovery. For unemployment to fall significantly, consumer income and spending also must pick up.

Growth in manufacturing hits lowest level in 2 years 08/01/11 [Last modified: Monday, August 1, 2011 9:01pm]
Photo reprints | Article reprints

Copyright: For copyright information, please check with the distributor of this item, Associated Press.
    

Join the discussion: Click to view comments, add yours

Loading...
  1. Make-A-Wish Foundation aims to help more kids in Tampa Bay

    Health

    The Make-A-Wish Foundation is on the lookout for sick children in the Tampa Bay area who need a once-in-a-lifetime pick-me-up.

    Grace Savage, a 10-year-old girl with a chromosomal disorder made a trek to the Clearwater Marine Aquarium last year, courtesy of the Make-A-Wish Foundation. The foundation intends to beef up its presence in the Tampa Bay area after a reorganization. The region is now the responsibility of the foundation's Southern Florida chapter, one of the most active in the country, with more than 11,000 wishes granted so far. [JIM DAMASKE   |   Times ]
  2. Florida hides details in nursing home reports. Federal agencies don't.

    Medicine

    TALLAHASSEE — Gov. Rick Scott widened his offensive Thursday against the Broward nursing home he blames for the deaths of 10 residents by setting up a tip line for information, but when it comes to access to the inspection reports of all nursing homes, the governor's administration has heavily censored what the …

    In the foreground is a document detailing the findings of a Feb. 2016 inspection at the Rehabilitation Center at Hollywood Hills obtained from a federal agency, the Center for Medicare and Medicaid Services. Behind it is the state?€™s version of the same document, from the Agency for Health Care Administration, showing how it has been redacted before being released to the public. [Miami Herald]
  3. 'Toxic' times: How repeal of Florida's tax on services reverberates, 30 years later

    State Roundup

    TALLAHASSEE — Long before Hurricane Irma attacked Florida, the state faced a troubled fiscal future that the storm will only make worse.

    Robertson says the tax debate is now “toxic.”
  4. Fewer Tampa Bay homeowners are underwater on their mortgages

    Real Estate

    The percentage of Tampa Bay homeowners underwater on their mortgages continues to drop. In the second quarter of this year, 10.2 percent of borrowers had negative equity compared to nearly 15 percent in the same period a year ago, CoreLogic reported Thursday. Nationally, 5.4 percent of all mortgaged homes were …

    The percentage of Tampa Bay homeowners underwater on their mortgages  continues to drop. [Times file photo]
  5. 'What Happened'? Clinton memoir sold 300,000 copies in first week

    Blogs

    Despite being met with decidedly mixed reviews, What Happened, Hillary Clinton's new memoir about the 2016 presidential campaign, sold a whopping 300,000 copies in its first week.

    The new memoir by former presidential candidate Hillary Clinton sold 300,000 copies in its first week.