The Institute for Supply Management today reports a contaction in manufacturing activity.

Economic activity in the manufacturing sector contracted in June for the first time since July 2009; however, the overall economy grew for the 37th consecutive month, say the nation’s supply executives in the latest Manufacturing ISM Report On Business^®.

The report was issued today by Bradley J. Holcomb, CPSM, CPSD, chair of the Institute for Supply Management™ Manufacturing Business Survey Committee. “The PMI registered 49.7 percent, a decrease of 3.8 percentage points from May’s reading of 53.5 percent, indicating contraction in the manufacturing sector for the first time since July 2009, when the PMI registered 49.2 percent.

AP puts the report in context.

Economists said the manufacturing figures were consistent with growth at an annual rate of 1.5 percent or less. That would be down from the January-March quarter’s already tepid annual pace of 1.9 percent.

“Our forecast that the U.S. will grow by around 2 percent this year is now looking a bit optimistic,” said Paul Dales, an economist at Capital Economics.

Despite the discouraging data, most economists aren’t predicting another recession.

James Pethokoukis, however, is raising the question. He comments:

these numbers are just the latest in a long-string of worrisome reports including rising initial unemployment claims, slowing job growth, falling consumer confidence, and declining durable goods orders.

Threats to the revenue forecast continue to pile up.