While the manufacturing sector expanded for the 12th straight month in July, activity fell 0.7 percent from June's level.


The Institute for Supply Management said its index of manufacturing activity (PMI) for July was down to a reading of 55.5, compared to 56.2 in June and 59.7 in May. However, any reading above 50 indicates growth in the sector.

"Manufacturing continued to grow during July, but at a slightly slower rate than in June," said Norbert Ore, chair of the Institute for Supply Management Manufacturing Business Survey Committee. "Employment, supplier deliveries and inventories improved during the month and reduced the impact of a month-over-month deceleration in new orders and production."

Despite the slower growth, demand is still quite strong in 10 of 18 industries.

Respondents said sales and quoting activity are slow and that business continues to be sluggish. They also indicated that retailers are unwilling to gamble on inventory. However, one respondent said July was the best month since October 2008.