Manufacturing Talk Radio · 2026-07-06 · 24 min
Key moments - from our scoring
Substance score
56 / 100
Five dimensions, 20 points each
The June 2026 ISM Services PMI report reveals sustained economic expansion across multiple sectors, with Steve Miller breaking down what a 54 reading means for supply chain professionals and broader economic sentiment. Services comprises roughly 90% of the US economy compared to manufacturing's 10%, yet manufacturing has outsized impact due to supply chain dependencies. Miller highlights that employment jumped significantly (up 3.3 percentage points), inventories fell sharply (down 11.3 points), and order backlogs increased 3.6 points, suggesting companies are hiring to meet demand rather than drawing down existing inventory. Pricing pressures continue easing, with the index dropping below 70 for the first time in months - though petroleum products remain elevated. Notable concerns include data center input shortages potentially constraining AI infrastructure buildout, semiconductor supply tightness, and continued tariff impacts on pricing. The report includes respondent commentary on drought impacts in Virginia affecting agriculture, fertilizer cost pressures from the Ukraine war affecting dairy and livestock, and utility industry constraints around transformers and high-voltage switches. With a six-month average PMI since January 2026 not seen since the second half of 2022, the outlook supports continued growth through year-end with moderated 1.2% pricing increases projected.
A PMI above 50 indicates expansion; at 54, all four sub-indexes (business activity, new orders, supplier deliveries, and employment) are above 50 and above their 12-month averages, signaling solid, sustained growth rather than contraction.
The prices index measures the diffusion of companies reporting increases versus decreases; at 67.7, it remains elevated because a significant majority of companies still report rising prices, though the trend is moderating from previous months.
Data center inputs are in short supply, semiconductors and memory chips face availability issues, transformers and high-voltage switches for utilities are constrained, and aluminum, copper, and piping are either elevated in price or in short supply.
The six-month average PMI from January through June 2026 is the strongest six-month run since July-December 2022, suggesting sustained momentum with continued growth and moderated 1.2% pricing increases projected for the remainder of 2026.
Agriculture is the fastest contracting industry in the survey, facing headwinds from drought impacts (particularly in Virginia), fertilizer cost pressures linked to the Ukraine war affecting input costs relative to selling prices.
Our reviewer’s read on each dimension, with quotes from the episode.
The episode provides solid foundational explanations of PMI data structure and methodology (diffusion index mechanics, sub-indexes, the 50-point threshold), but relies heavily on surface-level commentary and anecdotes. Novel insights are sparse: data center supply constraints and their potential dampening effect on AI growth is mentioned but unexplored, fertilizer cost impacts on agriculture are discussed briefly, and the diffusion index clarification is genuinely useful. However, much of the conversation devolves into context-setting, personal asides (electric cars, underwater welding), and confirmatory chat rather than pushing into deeper analysis. The respondent commentary and month-to-month trend discussion add modest value but lack actionable synthesis.
You see when you look down that third column of percent, so the geography of the report, services, PMI numbers are on the left... when you look at the numbers, uh, that kind of stand out. Uh, if you look at that, uh, percent point change column on the services PMI data, you see 3.3% or percentage points up for employment.
It's important actually, all the numbers. It's important to understand it's a diffusion index. So it's looking at the number of companies reporting that they're up or down... if you're at 50, you go down from 52 to 50, or in this case from 62 to 51. It doesn't mean you're going down, it means that less people are saying they're going up.
The episode rehashes standard PMI talking points and widely circulated supply chain concerns (semiconductors, tariffs, petroleum products, Ukraine war impact on fertilizers). The framing and analysis closely mirror typical ISM report coverage without novel angles or counterintuitive takes. The one potentially fresh observation - data center supply constraints as a potential dampener on AI growth - is mentioned in passing and never developed. The broader narrative (services growing, employment rising, prices stabilizing slightly) is predictable and uninspired. Discussion of respondent anecdotes adds some texture but not originality.
semiconductors, memory, um, supply, um, those are two that come through. Um, and then prices paid for um, petroleum related products.
the Ukraine war has had a, has had a huge impact in availability and cost of fertilizer.
Steve Miller, chair of the ISM Services Business Survey Committee, has genuine authority and operational proximity to the data he discusses. He speaks from direct stewardship of a major economic indicator and demonstrates technical competence in explaining diffusion methodology and data interpretation. However, his role is primarily that of a custodian of a published report rather than a practitioner who has built or scaled operations in the industries he analyzes. He adds credibility and insider access, but lacks the battle-worn operational experience of someone who has managed supply chains or capital deployment at scale. The guest is credible and relevant but not exceptional.
Steve uh, Miller who is the chair of the Institute for Supply Management Services Business Survey Committee report.
when you look at inventory sentiment over time, which I just happen to be able to do here, um, inventory sentiment at 52.6, saying we have too much inventory, um, is the lowest number we've had. In at least two years.
The episode includes some concrete data points: PMI reading of 54 for June 2026, sub-indexes above 50, employment up 3+ points to 51, prices index at 67.7 (down from 70), crude prices below 70 for first time since February, 30% drop in fuel prices by end of June, 7.4% YTD price increase with 1.2% projected for remainder of year, six-month PMI run since 2H 2022, and 250,000 viewers on the prior semiannual forecast episode. However, these figures are presented mostly as confirmatory data without deeper drilling. Named commodities and industries appear (semiconductors, memory, aluminum, copper, transformers, resins) but lack specific volume, pricing, or timeline data. The Virginia drought impact and respondent commentary provide texture but limited quantification. Specific numbers are present but interpretation and evidence synthesis remain shallow.
we had all four sub indexes that make up uh, the PMI... all above 50 plus all above their 12 month average.
I believe it was a 7.4% increase year to date on prices paid. We're projecting 1.2% for the rest of the year
The hosts demonstrate familiarity with Steve Miller and ask structurally sound questions (e.g., on inventory sentiment thresholds, industry specifics, forward guidance), but rarely press for depth or challenge claims. Louis offers softball setup questions and Amy provides listening-mode reactions ('That makes a lot of sense,' 'I love that') rather than substantive follow-ups. When Steve raises an interesting point - data center supply constraints potentially dampening AI growth - neither host excavates further. The conversation drifts frequently into tangential territory (electric cars, weather predictions, underwater welding) without redirecting to substantive analysis. The hosts are affable and demonstrate subject familiarity, but lack the sharpness to create genuine productive friction or excavate beneath surface claims. Follow-ups tend to restate rather than probe.
You'd have to have your arms like this. So Steve did uh, a good job. We got a solid expansion 54 for the June 2026 report. Give us the breakdown.
I always maintained, looking at your report, and certainly I'm not an expert, but anything between 47 and 53 is always like the no man's land.
Computed from the transcript - who did the talking, and the words that came up most.
Are we heading into economic expansion or just holding steady? Steve Miller breaks down the latest ISM Manufacturing and Services PMI reports - what the numbers really mean for jobs, prices, and supply chains going into the rest of 2026. All four PMI subindexes are now above 50, signaling growth. Employment jumped over three points. The Prices Index eased, hinting inflation pressure may be cooling. But supply chains are still tight in specific areas - especially data center components and petroleum products - and geopolitical events keep adding uncertainty. In this episode, Steve covers: - How to actually read a PMI report (and what the subindexes tell you) - Why employment numbers jumped - Where supply chains are still under pressure - What's driving prices up or down right now - Where economists expect growth to head next - Which industries offer the strongest job opportunities today Whether you're in manufacturing, supply chain, or just trying to make sense of what's happening with jobs and prices, this episode gives you a clear, no-jargon read on where the economy stands right now. Resource: ISM PMI Report - ismworld.org A Manufacturing Talk Radio production.
Transcribed and scored by The B2B Podcast Index.
Speaker A: Welcome to Manufacturing Talk Radio, your Everything Manufacturing podcast with host and veteran manufacturing industry expert Louis Weiss and co host Amy Nicklaus. Make sure to check out our catalog of 800 previous shows on YouTube, Spotify or wherever you're listening. Now let's get into the episode.
Speaker B: Foreign.
Speaker C: This is Lou Weiss and Amy Nicholas of Manufacturing Talk Radio. We're here for our monthly show with Steve uh, Miller who is the chair of the Institute for Supply Management Services Business Survey Committee report. It's a good thing you don't have to wear that on the back of a football jersey.
Speaker D: No kidding.
Speaker C: You'd have to have your arms like this. So Steve did uh, a good job. We got a solid expansion 54 for the June 2026 report. Give us the breakdown.
Speaker D: Yeah, it was, it was great to see um, the uh, for the fertile. For, for the third time in 2026 we had all four sub indexes that make up uh, the PMI. Um, both are all above 50 plus all above their 12 month average. Um, so really solid, really solid numbers. Uh, those are business activity, new orders, supplier deliveries and employment. And so the big change was employment up more than three points up to 51, so above where we've been for several months. Uh, so really good sign. The other sign is that we saw a little bit of a drop in the prices index as well. So down to 67.7 uh, which is the first time out of 70 in several months as well. So good sign. A lot of commentary around people starting to see gas, fuel and diesel prices going down although some are still seeing them elevated. Um, so good mix there showing a transition uh, down to lower pricing um, from a petroleum input type of thing. Petroleum products though we see are still elevated. So second month in a row they came through as up in price. The one thing that was a little bit um, concerning was the increase in the number of items that look like they're or that all are data center, uh, inputs are short supply. Ah so wonder if that will be a little bit of a um, little bit of dampener in the growth of data center construction and maybe growth of AI. But um, we'll see. It's only, it's only.
Speaker B: That was the same for the manufacturing report as well. Yeah,
Speaker C: one of the things that I noticed and go back a minute, the pricing, it's the 109th month of expansion. So is that never going down? I mean it's nine years.
Speaker D: We call that a depression when uh, when prices go down, uh, deflation is usually, usually doesn't accompany any positive economic activity.
Speaker C: So we should be rooting for higher
Speaker D: prices, uh, slightly higher prices.
Speaker C: Okay. Okay, sounds good.
Speaker B: Like me to share the actual chart from the report? Would that be helpful?
Speaker D: Sure.
Speaker B: Okay, great. Yeah, I just thought maybe that would help for, uh, our viewers.
Speaker C: There we go.
Speaker D: Yeah, very good.
Speaker C: Oh, how about it, Steve? Yes.
Speaker D: You see when you look down that third column of percent, so the geography of the report, services, PMI numbers are on the left. And then the final, um, um, uh, three columns are the manufacturing PMI as a reference point. So you can see for similar indexes, uh, how they compare. The services is about 90% of the US economy and manufacturing about 10%. But if you're not making stuff, you don't need a lot of the services. So it has an outsized impact even though it's only 10% of GDP. Um, when you look at the numbers, uh, that kind of stand out. Uh, if you look at that, uh, percent point change column on the services PMI data, you see 3.3% or percentage points up for employment. And you see 11.3% down on inventories. And then next one up, uh, 3.6 percentage point increase in backlog of orders. Um, so wonder if that backlog of orders is just uh, what's driving that employment increase where you know, we're seeing we're not able to keep up with the new orders, so we need to hire people, which is what it looks like in general. Um, but we'll, we'll continue to watch that and, and um, and that'll be a continued positive sign on the inventories number. It's important actually, all the numbers. It's important to understand it's a diffusion index. So it's looking at the number of companies reporting that they're up or down. And if more are reporting up than a reporting down, we're above 50 and depending, uh, on their weighting for GDP. But if you're at 50, you go down from 52 to 50, or in this case from 62 to 51. It doesn't mean you're going down, it means that less people are saying they're going up. So 50 is flat on average. Um, so that's one thing that when you listen to news reports, they seem to get wrong often that a down number doesn't mean we're shrinking, it just means we're growing slower if it's above 50.
Speaker C: Okay, okay.
Speaker B: I think that makes a lot of sense. I like slower than shrinking. That sounds better to me. Anyway, we're going to keep. I'm glad to hear that.
Speaker C: So the overall report is clear that we're still in the, uh, growing and expanding, um, ah. Aspect of the economy. Yes. Um, even though it's reporting that inventory sentiments are too high.
Speaker D: Yes. But. But when you look at inventory sentiment over time, which I just happen to be able to do here, um, inventory sentiment at 52.6, saying we have too much inventory, um, is the lowest number we've had. In at least two years.
Speaker C: So that's not terrible.
Speaker D: It's not terrible, no.
Speaker C: Okay. Uh, I always maintained, looking at your report, and certainly I'm not an expert, but anything between 47 and 53 is always like the no man's land. It's like maybe we're not sure what we're talking about, but I might make
Speaker D: it a little bit tighter than that, Lou, But I think you're right. You bounce around the 50. You know, if you're 48.7, is it that much different than 51.1?
Speaker C: Yeah. I mean, this is not a science. This is the best guess. Right, Right.
Speaker D: Right. Uh, when you see inflections, you see something go from negative to positive by 8% or something like that, for me,
Speaker C: that's the kind of thing that makes crisis. So let's talk about some of the respondent, uh, uh, comments. Okay. Which I always find to be interesting and giving maybe even a better or additional insight to what the numbers really mean.
Speaker B: I find them incredibly helpful as, you know, the, the layman, if you will, or. Or the, you know, the everyday consumer who's kind of looking and checking it out to get an idea of really what's happening and taking your information as well is. And what that response is. I mean, I did notice that, you know, the droughts in Virginia are causing, you know, a big problem. That's not something that I would have necessarily equated to this, you know, the entire impact on, um, the report itself. So I thought that was very interesting.
Speaker D: Yeah. So I try and do two things with the quotes because we got hundreds of comments, um, each month on various different aspects. Some indexes, some overall, um, what's up and what's down, um, or in short supply, that type of thing. Um, and what I try and do with the respondents is if we're seeing something that's a trend that lots of people are talking about, I try and make sure that we have some of those in there. And then if there's some outliers as well that are in, like the one you just brought up around Virginia, that was, um. If you look at what's happening you go whoa, this is pretty significant. Um, but it was only came through in one comment.
Speaker B: Okay. It was like, oh, wow, that really makes a lot of sense. I could see why that would be a big impact and not something I had really anticipated being in the report. So I thought those were great.
Speaker D: And then um, when you look at the industries and what's happening with the industries, uh, you'll see that agriculture, uh, um, is the bottom on the overall pmi. So they're the fastest um, uh, fastest contracting inventory or sorry, inventory item industry, uh, in the survey.
Speaker B: Okay, that makes a lot of sense
Speaker D: then to try to get those together so that people can see those. Um, we saw less overall in the commentary this month around uh, the war and gas prices, fuel prices, um, but there still were some, um, and then we still see um, tariff commentary, commentary coming through in terms of cause, uh, for increased prices month over month.
Speaker C: Okay, so, and what I got gas this morning, $3.59. That's about a dollar cheaper than it was a month or two ago.
Speaker D: Yeah, yeah, we've seen a 30% drop at end of June. Um, crude prices got below 70 again for their first time since February. And um, and then you know, who knows, who knows where we go from here. Hopefully, hopefully we can we get into the mid-50s back where it was at its low over the last several years.
Speaker C: Okay. Amy,
Speaker B: I um, don't need to get gas because I have an electric car. So I only. I keep track of it through, through these reports and through.
Speaker C: Lou, I bet you have a Tesla.
Speaker B: I do, I do, but it's. Who know, I mean the parts for those might be a problem but you know, the mechanical or not. I guess not mechanical electrical parts might be a problem for those but.
Speaker C: Yeah. What, what comments from your responders shows certain concerns.
Speaker D: Yeah, so the, the um, um, semiconductors, memory, um, supply, um, those are two that come through. Um, and then prices paid for um, petroleum related products. Uh, we saw that for the second time or second month in a row in the commodities up in price. But then we also saw it in the commentary, resins in particular. Uh, one of the respondents was buying ahead for resins before they saw the full impact uh, from oil prices that went up in March.
Speaker B: I think it's important to know and I actually, you know, I don't know if you've seen the show Landman. Um, I'm waiting for the next season but one of the points that they make in this show is that what most people don't realize is that petroleum is in everything like it's in your chapstick. It is. I mean really, when petroleum, when you see petroleum down, it's across. It's almost in anything that you have. And I didn't realize that. And I don't think that most consumers realize that petroleum is not just. We're not just talking about like gas.
Speaker D: Yeah. I think one of the other things that's out there that's a little bit um. Certainly something that I wasn't familiar with until I talked to a friend of mine who's uh, who is a CPO at a fertilizer company, um, is that the Ukraine war has had a, has had a huge impact in availability and cost of fertilizer. Uh, so you look in the agricultural industry and you'll see that in the commentary as well. Costs, um, for inputs, uh, for dairy and for some ag, uh, are above their prices that they can sell for. And one of the um, contributors to that is either um, use of fertilizer, availability, fertilizer to produce feedstock, um, and then fertilizer just to produce, you know, to help produce food.
Speaker B: It's crazy how it really all. It's so much bigger than just like that one thing.
Speaker D: Yeah, yeah.
Speaker C: It seems though that the utility industry is continuing to have issues in terms of supply and shortages and price and so on. Does that look like it's going to continue?
Speaker D: It's somehow they're seeming to get past it um, because they're still, their growth is still fantastic. Um, but uh, that does transformers, um, ah, high voltage switches, uh, and then, then when you go into basic materials like aluminum and copper, uh, we've seen that on an ongoing basis either up in, in price or short supply. Um, I think some of the uh, piping was an issue last month as well. From a short supply standpoint. It didn't come through in the um. For the commodities that we list either up in price, down in price, we look for some consistency across multiple companies. Not just one company mentioning it, but in the commentary we had one talking about that impacting utility build outs. Utility or data center build outs and utility build outs.
Speaker C: So based on the report the way it is, and we are now in the deep part of the summer, is this going to continue in the positive trend that it seems to be?
Speaker D: Um, in our mid year from last month, um, we were projecting um, good growth for the rest of the year and moderated pricing increases where we had seen uh, about. I believe it was a 7.4% increase year to date on prices paid. We're projecting 1.2% for the rest of the year as a supply management community, uh, with continued growth, continued capital investment. So all, all really good signs in the mid year. And then this month's uh, PMI information looks like it, it uh, supports that
Speaker C: by the way, uh, for the audience. Um, last week or two weeks ago we did the ISM semiannual uh, forecast with Steve and Susan Spence, um, that were on our show and it's all an hour of great discussion and great talk about the futures and it looks as though that the going forward six months is going to be great and here this month is only supporting that. So if you're interested in hearing what's going on in regards to the future six months or to through the end of the year, listen to last week's um, show um, that we did.
Speaker D: So Lou, what I really like about, liked about doing that is that um, Sue's background is heavy manufacturing and some services. Mine's heavy services and some manufacturing. So the ability to, to um, be able to answer your questions thoughtfully. Uh, and you have great questions. I think, um, they made it really fun last month.
Speaker C: Oh great, great. Well, there was a quarter of a million, quarter million people that watched it, so it must have done something. We're not CNN or MSN now or whatever, but we have a strong audience that tunes into the ISM report. So I thank you and uh, Susan for being on our show as regulars and you have been since November 4th, 2013 and our 13 is coming up this coming November 13th. I haven't done many things for 13 years. Marriages, yes, but uh, yes, beyond that. So, um, it looks as though things are going to be continuing, uh, going in that direction based on this report and also the semiannual forecast. So that's all, you know, really great stuff unless as economists say, something major changes. Now. The only major change I see potentially is the end of the war. So let's uh, let's forecast on our own a little bit. What happens if the war ends the day after tomorrow? I'm putting you on the spot, Steve.
Speaker D: Yeah, two things.
Speaker C: Um,
Speaker D: demand for transportation drops and fuel prices drop faster than they would already. Those are, those are the two things that I think would be, you know, measurable, um, and maybe a uh, minor impact into wholesale trade.
Speaker C: If I'm not mistaken, um, the fuel pricing are not in the mix of inflation numbers, am I correct?
Speaker D: It depends which one you look at. It is, it is included in our pricing number.
Speaker C: Oh, okay. So if prices drop another 50 cents a gallon, uh, inflation is also going to Drop. Correct.
Speaker D: Um, from your mouth, the God's ears. We'll see. You know when, when interest rates got cut, mortgage rates went up. You know that's, sometimes some of that
Speaker C: is called opportunistic pricing, sometimes nature gouging in some circles. Yeah,
Speaker B: yeah.
Speaker D: Lou, Something about the, the ability to sustain uh, growth though. Um, we're, I was looking at the numbers since, since January, so 2026 numbers for the PMI. We haven't seen a six month run like that, um, since 2H22.
Speaker C: Since the second half of second half of 2022. Really?
Speaker D: July through December 2022 was the last time we saw a six month average above where we are right now for the six month.
Speaker C: That's impressive.
Speaker D: Yeah, it seems like a really good sign.
Speaker C: Very good, very good. I'm looking forward to talking more about it as the months go by. Uh, I wish to thank uh, you Steve, for your analysis and your report. Amy, do you have any final comments or words?
Speaker B: No, I mean, I think I just asked you the same thing I ask you almost every time was that um, obviously we're seeing a great uptick and as a consumer, if I'm looking at the report, what would you say that we should take it as it means for us as the consumer, not just as the uh, person that's within the supply chain.
Speaker D: Uh, for those of us that um, are early in our careers, that are looking for future growth and growth potential, service industry looks like it's a great place to be. Starting to see employment number come back and it seems to be because we've had sustained business activity and new order growth, seeing the backlog grow a little bit, it looks like we're in for a good run. Uh, so, you know, now's the time. I think if you're looking for your next gig, um, you know, or looking to contribute more where you are, it looks like in services industry is a great place to be.
Speaker B: That's great feedback. I love that. That's a great way to close this out.
Speaker C: Manufacturing also is a very strong place to be if you're starting out in your career. Um, you may get your hands dirty, but you may be earning six figure incomes.
Speaker D: Oh, and you learn like crazy when you're seeing how things, everything supply chain. If you're a supply chain aficionado, seeing how it really works is really right.
Speaker C: I'm trying to talk my godson into going into underwater welding. You get to get to go swimming every day and make $150,000 a year. Yeah.
Speaker D: Make sure he stays in cold weather. Sharks are coming. Sharks are coming north.
Speaker C: That's right. Well, I wish to, uh, again thank you, Steve, and a great report. Keep up the good work. Uh, and we're going to see you, uh, next month. Uh, any parting, parting words to you?
Speaker D: Uh, stay cool if you're on the East Coast.
Speaker B: Yeah.
Speaker C: You know what? I, you know what's interesting? For the last four days, this is, uh, now July 5th. This is now the fifth day in, in New Jersey that they've been predicting four to five inches of rain, and it hasn't happened yet. So that's the good news.
Speaker D: But a lot of people watched, a
Speaker C: lot of people watch the show. That's right. That's right. Because they don't want to be out in the maybe rain. That's right. Everybody keep listening to us. If you like the show, hit the like button. We really appreciate that. And, uh, we'll see you next time.
Speaker B: Definitely. Subscribe.
Speaker A: Thanks again for joining us on another episode of Manufacturing Talk Radio with hosts Louis Weiss and Amy Nicklaus. Before you head out, make sure to subscribe and leave us a review. For more information about the show and the manufacturing industry, head over to MFGTalkradio.com that's mfg t-a l k r a d I o dot com. This podcast is a part of the C Suite Radio Network. For more top business podcasts, visit C suiteradio.
Speaker C: Com.
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