Industry grows for 13th straight month
The manufacturing sector is still growing, though a bit less in June than in May. Manufacturing PMI was at 60.6% for June, according to the Institute for Supply Management, down 0.6% from May. Anything above 50 indicates growth. Also growing for a 13th consecutive month was the Price Index, which at 92.1 is now at its highest level since 1979.
Demand remains strong as the economy recovers from the COVID-19 pandemic, but supply chains still lag behind as different sectors and parts of the world recover at different paces.
“Supply chain constraints, from mechanical to electronics (products) continue to be challenging, from both availability and logistics perspectives. Inflationary pressure on materials due to supply and demand imbalance. Electronic components by far the biggest challenge, with lead times going from 16 weeks to 52-plus weeks. Processors are a critical shortage, leading to us working 24/7 to redesign printed circuit board assemblies to change components. We are extending our PO coverage over 12 months in many cases and committing to non-cancelable, non-returnable (NCNR) terms to assure supply,” the computer & electronic products subsector reported.
Production is at 100% in the transportation equipment sector as COVID-19 restrictions have mostly been lifted, but the microchip shortage is altering production schedules and limiting features.
“Demand continues to be strong, and customer-ordering patterns are shifting to include long-term demand. Customers are now placing orders for fourth quarter 2021 and first quarter 2022 due to global supply chain issues,” the fabricated metal products sector said.
Higher prices, supply chain, and lack of available labor continue to affect all manufacturing sectors, as well as just about every other industry as the economy reboots. “We continue to be oversold, based on what we are currently capable of producing. Lack of labor is killing us,” the primary metals sector said.