Production at US manufacturers increased for the fourteenth month running in July. The pace of expansion accelerated from that seen in June to a solid rate. Panellists commonly attributed the upturn to higher client demand.
New orders received by US manufacturing firms grew at a solid pace, recovering from the nine-month low seen in June. A number of respondents noted that the expansion in new business was due to larger client bases and an increased willingness to spend. That said, orders from abroad decreased for the first time in ten months, albeit only slightly.
Backlogs of work fell for the third month running in July. Respondents commonly stated that outstanding business had decreased due to job creation and efficiencies made in the production process. Notably, the latest expansion in staffing levels was the strongest in five months.
In line with greater production schedules, firms increased their purchasing activity and to the greatest extent in five months. At the same time, companies signalled higher inventories of both postand pre-production items in July. Stock building was generally linked to increased output and greater client demand. However, stronger demand for inputs and stock shortages at vendors led to a further lengthening in average delivery times.
Business confidence among US manufacturing firms improved to a six-month high in July. Stronger optimism was generally linked to more encouraging market conditions and stronger client demand.
Average input costs rose at a modest pace in July. Anecdotal evidence linked input price inflation to higher component costs and supplier shortages. Meanwhile, average prices charged by US manufacturing firms increased at a modest pace.