US ISM Manufacturing likely to show a modest pace of growth in July – Wells Fargo

Research Team at Wells Fargo Securities, suggests that the US manufacturing industry continues to face its share of challenges.

Key Quotes

“The dollar remains close to its strongest level in more than a decade, while domestic investment has been sapped by lower commodity prices and a generally sluggish growth environment.

Although these factors remain headwinds, factory activity is showing signs of stabilizing. The ISM manufacturing index rose to 53.2 last month, its highest level in more than a year. Regional surveys suggest manufacturing activity continued to grow at a modest pace in July. An average of the New York, Philly, Richmond, Dallas and Kansas City Fed manufacturing surveys improved 3 points in July.

Non-manufacturing activity has remained decidedly stronger. We expect the ISM non-manufacturing index, released on Wednesday, to edge down slightly in July, but to remain firmly in expansion territory at 55.8.”