US Manufacturing Stalls in July

The IHS Markit US Manufacturing PMI fell to 50.0 in July 2019, the lowest since September 2009 and below market expectations of 51.0, a preliminary estimate showed. Output declined the most since August 2009 and employment dropped for the first time in six years.

The negative influences on the headline PMI were lower production volumes, a fall in employment and reduced stocks of purchases. Production levels dropped only slightly, but the rate of decline was the greatest since August 2009. Moreover, the marginal decrease in staffing levels ended a six-year period of sustained job creation across the manufacturing sector.

Survey respondents noted that a downturn in the automotive sector and heightened global economic uncertainty were factors behind the loss of momentum for the manufacturing sector in July. In some cases, goods producers simply commented on a cyclical downturn in sales following elevated growth rates in 2018.

Latest data revealed that export sales were particularly subdued, with new work from abroad falling at the fastest pace since April 2016. However, domestic demand continued to rise, as signalled by a sustained improvement in total new order books.

Marginal increases in new business received by manufacturing companies have been achieved during each of the past two months, following a decline in May.

US Manufacturing Stalls in July

Markit Economics | Joana Ferreira |
7/24/2019 1:52:06 PM