June manufacturing data supportive of LTL demand

Manufacturing activity expanded for a sixth consecutive month in June, albeit at a more subdued pace. A survey of manufacturing supply executives returned a 53. 3 reading for the recent month, 70 basis points below analysts’ expectations and the May result.

The June reading was the second-highest this year and is consistent with 2% real GDP growth, a Wednesday report said. A reading above 50 for the Institute for Supply Management’s Manufacturing PMI signals expansion, while one below 50 indicates contraction. The group said that when the index sustains a level above 47.

5 over time, the overall economy usually grows. The new orders subindex—an indicator of future activity—was also higher for a sixth straight month at 56. That was 80 bps lower than the May update. Of the six largest industries tracked, four reported an increase in orders (computer and electronic, machinery, transportation equipment and chemical products).

“[New orders] demand sentiment was positive in June, with a 2. 7-to-1 ratio of positive to negative comments,” said Susan Spence, chair of the ISM Manufacturing Business Survey Committee. window. googletag = window. googletag || {cmd: []}; googletag. cmd. push(function() {googletag.

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push(function() {googletag. display('div-gpt-ad-1709668545404-0'); }); SONAR: Flatbed Outbound Tender Rejection Index (FOTRI. USA) for 2026 (blue shaded area), 2025 (yellow line), 2024 (green line) and 2023 (pink line). A proxy for flatbed truck capacity, the tender rejection index shows the number of loads being rejected by carriers.

Current tender rejections show a tight flatbed market. To learn more about SONAR, click here. Latest update supportive of LTL demand The manufacturing complex has an outsized impact on less-than-truckload volumes. Roughly two-thirds of LTL carrier revenue is tied to industrial output. Inflections in ISM data usually lead LTL tonnage by a few months. A 51.

9 reading for new orders (over time) typically signals growth in the Census Bureau’s manufacturing orders dataset. Intraquarter updates provided by public LTL carriers in early June showed freight demand continued to improve.

Two-year-stacked comparisons, which smooth out prior-year volatility, turned positive for the group in May following a prolonged downturn. Improved contributions from the manufacturing sector and the return of some freight that was lost to a depressed truckload market were among the catalysts.

Even with most public LTL carriers holding approximately 30% excess door capacity, pricing remains rational as contractual rates continue to increase by a mid-single-digit percentage on average every quarter. Further, general rate increases are occurring at an accelerated pace. ArcBest (NASDAQ: ARCB) implemented a 5. 9% GRI at its LTL unit, ABF Freight.

The June 22 effective date was approximately six weeks ahead of the already truncated 11-month cadence the industry has been following. The company also raised its second-quarter outlook, pointing to pricing initiatives and cost takeouts as the reasons.

XPO’s Q2 tonnage trending ahead of guidance Old Dominion’s May update shows an improving LTL market Saia’s tonnage growth accelerates in May on easier comp Other June ISM takeaways Tightness across the transportation space could be seen in the ISM’s supplier deliveries subindex. A 57. 4 reading (3.

2 percentage points lower than May) signaled slower deliveries and potential supply chain constraints for a seventh straight month. Customers’ inventories remained in the “too low” band, returning a 42. 3 reading, down 40 bps sequentially. The current level suggests future production is likely to step higher.

Production was positive for an eighth consecutive month at 52. 2, but down 2. 1 points from May. Employment (49. 7) remained slightly contractionary, but at a slower pace, up 1. 1 points from May. The manufacturing complex has been leaning on robots and automation to produce more with less.

However, 64% of respondents said they were actively hiring, while only 36% said they were “managing head counts.” The trend was inverse to January, when 66% of panelists said they were holding staffing levels steady. window. googletag = window. googletag || {cmd: []}; googletag. cmd. push(function() {googletag.

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