Textile mills were the hardest hit as the US manufacturing sector lost approximately 8,000 jobs in June this year, as reported by the Bureau of Labor Statistics (BLS).
Based on a survey of purchasing and supply executives across sectors including textile mills, apparel, leather and allied products, the Institute for Supply Management’s latest Manufacturing ISM Report on Business, reveals, not just new orders but production and employment also tightened during the month.
Manufacturing activity in the US contracted at the close of the second quarter, states Timothy R. Fiore, Chairperson, ISM Manufacturing Business Survey Committee. Weak demand, declining output, and accommodating inputs emerged as the key trends during the quarter, he adds.
The Manufacturing PMI stood at 48.5 percent in June, a 0.2 percentage point drop from May. Despite this, the index remained above 42.5 percent for 50 months, except for a dip in April 2020, indicating overall economic expansion over this period, Fiore highlights.
Textile mills reported higher inventories in June, contrary to the broader trend of lower manufacturer-held inventory. Both apparel and leather goods producers, along with textile mills, indicated that customer inventories were ‘too high’ last month.
The New Orders Index fell to 49.3 percent in June, below the growth threshold but above May’s 45.4 percent. Textile mills reported a decline in new orders. ‘Panelists’ comments noted continued uncertainty and cautiousness as new order levels and customer inventory accounts continue to underperform, adds Fiore.
Order backlogs continued to decline, a trend persisting for 21 months, while the ISM Production Index dropped to 48.5 percent in June from 50.2 percent in May. Textile mills and fabric producers reported lower production, mirroring the broader decline.
Employment also declined to 49.3 percent from May’s 51.1 percent. Textile firms were among those reducing employment through hiring freezes, layoffs, and other methods.
Rising raw material prices added to economic pressures, with the ISM Prices Index reflecting six months of growth in June. However, growth slowed from 57 percent in May to 52.1 percent in June.y.”
Scott Paul, President, Alliance for American Manufacturing echoes, as seen from the June figures, the combination of an overly strong dollar and high interest rates is dampening the growth in factory jobs. Until the Federal Reserve changes course, factory sector will continue to remain stalled, he adds.
