ISM Manufacturing Index Drops in June

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he Institute for Supply Management’s manufacturing index slowed in June, the group said Monday.

SM’s factory index fell to 53.8 from 54.4 in May, the group said in its monthly report.

Readings higher than 50 indicate expansion in manufacturing. The index has shown expansion since May 2003.

“Manufacturing growth continued in June, and although the rate of growth slowed slightly, renewed strength in June’s New Orders Index provides encouragement for the third quarter,” said Norbert Ore, chairman of ISM’s manufacturing committee.

ISM’s prices-paid index fell 0.5 points to 76.5.

New orders, which make up about a third of the total index, rose 4.2 points to 57.9.

The production index, a measure of work being performed, fell 2.1 points to 55.1.

The employment index dropped 4.2 to 48.7. The inventories index rose 1.5 point to 45.5.

SM, based in Tempe, Ariz., surveys more than 400 companies in 20 industries, including transportation, to compile its index.