Manufacturing activity expanded for a sixth consecutive month in June, with the ISM Manufacturing PMI registering 53.3, 70 basis points below expectations and the May result but still the second-highest reading this year. The new orders subindex, a forward-looking indicator, came in at 56, down 80 basis points from May, with four of the six largest industries reporting order growth. The data is supportive of less-than-truckload demand, as roughly two-thirds of LTL carrier revenue is tied to the industrial sector, and public LTL carriers have reported improving freight demand with two-year-stacked tonnage comparisons turning positive in May. Supplier deliveries slowed for a seventh straight month at 57.4, while customers' inventories remained too low at 42.3, suggesting future production increases. Shares of LTL carriers rose 1% to 2% in midday trading Wednesday.
ArcBest CorpISM manufacturing PMI and new orders subindex indicate expanding industrial activity, which drives LTL demand as two-thirds of LTL revenue is tied to the industrial sector.