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Macro Pulse highlights recent activity and events expected to affect the U.S. economy over the next 24 months. While the review is of the entire U.S. economy its particular focus is on developments affecting the Forest Products industry. Everyone with a stake in any level of the sector can benefit from
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Wednesday, July 6, 2011

June 2011 ISM Reports

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The pace of growth in manufacturing rebounded somewhat in June, with the Institute for Supply Management’s (ISM) PMI ticking up to 55.3, from 53.5 in May. “New orders and production were both modestly up from last month, and employment showed continued strength,” said Bradley Holcomb, chair of ISM’s Manufacturing Business Survey Committee. "The rate of increase in prices slowed for the second consecutive month,…[to] the lowest figure since August 2010…. While the rate of price increases has slowed and the list of commodities up in price has shortened, commodity and input prices continue to be a concern across several industries."

Wood and Paper Products exhibited their too-familiar patterns, with Paper Products reporting growth and Wood Products contracting. Paper Products’ improvement was fairly broad, encompassing new export and domestic orders, the need to replenish inventories, and increases in production and employment. One Paper Products respondent wrote that "sales continue to be stronger than expected across both retail and industrial channels. Material costs are definitely rising and will force increases to end-use customers."
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The non-manufacturing sector grew at a somewhat slower pace in June, reflected by a 1.3 percentage point drop (to 53.3 percent) in the non-manufacturing index (now known simply as the “NMI”). Two of the three service industries we track expanded: Real Estate, Rental & Leasing; and Construction.

The rate of input price increases slowed for both the manufacturing and service sectors. The index of prices paid by non-manufacturers tumbled by 8.7 percentage points, to 60.9 percent; manufacturers saw a similar drop of 8.5 percentage points, to 68.0 (50 is the breakpoint between rising and falling prices). Paper (including copy paper) was listed as up in price; diesel fuel and gasoline were listed as both up and down in price. No relevant commodity was described as in short supply.

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