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Manufacturing Expansion Signals Strengthening LTL Demand Ahead

Manufacturing activity expanded for a sixth consecutive month in June, posting a 53.3 reading on the Institute for Supply Management's Manufacturing PMI. The index came in 70 basis points below expectations. The index remains well above the 50 threshold indicating expansion and the 47.5 level associated with broader economic improvement. New orders climbed to 56, marking six straight months of gains despite an 80 basis point dip from May. Four of the six largest industries tracked—computer and electronics, machinery, transportation equipment and chemicals—reported increased orders. Supply executives expressed positive sentiment at a 2.7-to-1 ratio of favorable to unfavorable comments. The June data aligns with 2% real GDP growth expectations. Manufacturing drives roughly two-thirds of less-than-truckload carrier revenue, with ISM inflections typically leading LTL tonnage by several months. Recent quarterly updates from major LTL carriers showed demand improvement, with two-year comparisons turning positive in May.