A key manufacturing index suggests U.S. manufacturing growth in the second quarter slowed, the latest sign that the major economic driver will continue to lose momentum in the second half of the year.
The Manufacturers Alliance for Productivity and Innovation’s June quarterly index slipped from 65 to 61 from March, marking the eight straight decline since the index hit a record high of 81 in June 2010. But because the index is far above the 50 mark, production still has to slow dramatically before the sector contracts, according to the report released Thursday.
“Unsurprisingly, the Non-U.S. Prospective Shipments and Non-U.S. Investment Indexes registered the sharpest declines, showing the effects of the eurozone recession and the slowing growth in China,” said MAPI Senior Economist and survey coordinator Donald Norman.
The Export Orders Index, a comparison of exports in second quarter of 2012 to the same period in 2011, fell to 63 from a level of 79 in March. The Backlog Orders Index fell to 58 from 71 in the same period.
Orders in the pipeline also appear to have diminished, as the index monitoring expected orders fell to 70 in June from 77 in March. With the inventory index increasing to 73 from 67 in the same period, products also appear to be sitting on shelves longer.
The report comes after the Institute for Supply Management’s manufacturing index painted a similar picture, and the Commerce Department reported the growth in durable orders in May slowed.