Two things to note in today’s quote: 1. The U.S. manufacturing industry feels quite good about its present lot. 2. Much of the sector’s strength is coming from exports. Please keep number 2 in mind if/when someone cites pejoratively the high level of goods we import from other nations.
You see, trade is a two-way street (as in reciprocal [as in ]). Our talents and resources allow us a global comparative advantage with regard to the production of certain goods, services and investment assets. Other countries’ structures and resources allow them the same. Freedom to trade across boarders is an absolutely necessity if we’re to obtain the vast multitude of things we need/desire under the best possible terms.
From Bloomberg’s commentary on yesterday’s release of July’s ISM Manufacturing Index:
Another month and another strong report from ISM’s manufacturing sample where the July PMI came in 1 tenth above expectations at 56.3. New orders continue to post unusually strong growth, at 60.4 in July with backlog orders also unusually strong, at 55.0. Much of this strength appears to be coming from exports where the new orders index is at 57.5. Production is over 60 at 60.6 with inventories steady and delivery times slowing moderately — all very positive indications. Input costs are even up in this report, at 62.0 for a 7 point monthly gain. If the nation’s factory sector could only live up to this report, strong acceleration through the second half would be the call.