US manufacturing grows at slower pace
THE US manufacturing sector grew again in July, marking five straight months of expansion, but at a slower pace than expected.
The Institute for Supply Management said its purchasing manager’s index for July remained in positive territory at 52.6, but was down from June’s strong showing of 53.2. Any reading above 50 represents growth.
Within the index, production was up 0.7 percent and inventories were up 0.1pc. But new orders, employment, prices and supplier deliveries were all down.
The overall index reading was below the 53.0 consensus but still above the 51.3 reading announced in May, according to Jim O’Sullivan of High Frequency Economics.
“In short, down a little, albeit after a larger rise in June,” said Mr O’Sullivan.
“The net result is still at least modest improvement in recent months.”
The numbers come after the Commerce Department released on July 29 anemic numbers for economic activity, putting second-quarter GDP growth at 1.2pc, well below analysts’ expectations despite strong consumer spending.
Among survey respondents, nonmetallic mineral products and computers and electronic goods saw strong demand.
Machinery, transportation equipment and wood products were down.
According to Michael Montgomery of IHS Global Insight, the report sent “mixed messages.”
“The first: that things may not really have been as good in June as they first appeared,” he said. “The second message was that output continued to firm, with that score rising to its highest level since January 2015, even though it only beat March of this year by a 10th of an index point.”
“Five decent months following five weak ones shows little total movement over time,” said Mr Montgomery. “The good side of the details was orders and output, both sporting respectable scores.” –
Jim O'Sullivan sees a modest improvement.