Economy Manufacturing

In this May 13 photo, Ford Motor Co. employees work a ventilator at the Rawsonville plant in Ypsilanti Township, Michigan. The plant was converted into a ventilator factory, as hospitals battling the coronavirus report shortages of the life-saving devices. According to the Institute for Supply Management, U.S. manufacturing rebounded in June 2020 as major parts of the country opened back up.

SILVER SPRING, Md. — U.S. manufacturing rebounded in June as major parts of the country opened back up, ending three months of contraction in the sector caused by the coronavirus pandemic.

The Institute for Supply Management, an association of purchasing managers, said Wednesday that its manufacturing index rose to 52.6 last month after registering 43.1 in May and 41.5 in April. Any reading below 50 signals that U.S. manufacturers are contracting.

New orders, production, hiring and new export orders all jumped in June, after they all declined in May but at a slower pace than in April.

“As predicted, the growth cycle has returned after three straight months of COVID-19 disruptions,” said Timothy Fiore, chair of ISM manufacturing index committee. “Demand, consumption and inputs are reaching parity and are positioned for a demand-driven expansion cycle as we enter the second half of the year.”

However, just as the June numbers reflect the broader economic improvements as major parts of the country opened up for business, a spike in coronavirus cases in high-population states like California, Florida and Texas is a cause for concern.

Gregory Daco, chief economist at Oxford Economics, said that while the June report was positive, weak demand, lingering supply chain disruptions and high uncertainty, among other factors, could make for a sluggish recovery.

Of the 18 manufacturing industries, 13 reported growth in June. Among the six biggest industry sectors, food, beverage and tobacco performed the best, while computer and electronics and chemical returned to growth. Transportation equipment and fabricated metal products still contracted, “but at much softer levels,” Fiore noted.