US factory activity continues growing at brisk pace in June, ISM says

US factory output continued growing at a brisk pace last month, as did prices amid nearly across-the-board supply chain issues.

The Institute for Supply Management's manufacturing sector Purchasing Managers' Index dipped from a reading of 61.2 for May to 60.6 in June.

Economists had penciled in a reading of 61.0.

New orders also continued to come in at a fast pace as reflected in the corresponding sub-index, which only slipped from 67.0 to 66.0.

A sub-index inked to hiring also eased a little, from 50.9 to 49.9.

The sub-index tracking the prices paid by firms on the other hand rose from 88.0 to 92.1 - a 42-year high.

Among the managers responding to the survey, one from the Computer and Electronic Products sector said that lead times for electronic components were running from 16 weeks to 52-plus weeks.

Another from the Fabricated Metals space meanwhile said that customer ordering patterns were shifting to include long-term demand in response to supply-chain issues, with customers now placing orders for the fourth quarter of 2021 and first quarter of 2022.

"Looking ahead, we’d be surprised to see the headline ISM, or the key new orders index, rebounding to new highs. China’s PMIs are off their highs, and point to the ISM sliding to the high 50s over the summer," said Ian Shepherdson, chief economist at Pantheon Macroeconomics.

"That would not be a disaster, and in any event the ISM might remain elevated relative to China’s numbers, thanks to the strength of domestic U.S. demand."