US supply executives reported stronger than expected growth in the manufacturing sector of the world's largest economy in June thanks to rising new orders and solid production growth.
The Institute for Supply Management's (ISM) purchasing managers' index (PMI) showed that of 18 manufacturing industries in the US, 15 reported growth – the best among them, household furnishings, non-metallic mineral products, machinery and electrical equipment.
Headline ISM index
The headline index climbed to 57.8 in June, up from 54.9 in May and beating expectations of a smaller climb to 55.2. A reading above 50 indicates expanding activity in the sector.
June was the tenth-consecutive month of growth for the index and its highest level since August 2014.
As well as stronger new orders and production, managers also reported robust growth in employment, which ISM said was generally consistent with an increase in labour department data on manufacturing employment.
With the Federal Reserve expected to make a third quarter-point rate increase this year in September, analysts are looking to strength in the labour market. The Bureau of Labor Statistics releases its monthly payrolls data on Friday.
IHS Markit survey contrasts
The ISM data contrasted sharply with a similar report of purchasing executives by IHS Markit, whose data pointed to a rather subdued month for the manufacturing sector.
Its index registered 52 in June, down from 52.7 in May and was said to reflect slower rates of output and new business growth.