By Xavier Fontdegloria
The U.S. manufacturing sector grew in July at its slowest pace in two years, driven by a fall in new order inflows and production, according to data from a purchasing managers survey released Monday.
The S&P Global U.S. manufacturing PMI decreased to 52.2 in July from 52.7 in June, down marginally from the preliminary reading of 52.3. A reading above 50.0 points to an expansion in activity, while a figure below that threshold points to a contraction.
The reading matches economists expectations in a poll by The Wall Street Journal.
U.S. manufacturers reported the toughest business conditions in July since 2009 with the exception of pandemic lockdown periods, said Chris Williamson, chief business economist at S&P Global.
“A growth spurt in the spring has quickly gone into reverse, with new orders for factory goods down for a second straight month in July, leading to the first drop in production for two years and sharply reduced employment growth,” he said.
The drop in output reflected weaker demand conditions, although backlogs of work continued to increase as labor and input shortages persisted, S&P Global said.
The rising cost of living is the most commonly cited cause of lower sales, as well as the worsening economic outlook, the report said.
Price increases continued to soften over the month for both raw materials and finished products, data from the survey showed. The cooling inflation rate in factories add to signs that inflation has peaked, Mr. Williamson said.
Expectations among goods-producers regarding the outlook for output over the coming year remained subdued amid inflation and supply chain concerns, as well as a gloomier global economic outlook, S&P Global said.
Write to Xavier Fontdegloria at [email protected]
(END) Dow Jones Newswires
August 01, 2022 10:19 ET (14:19 GMT)
Copyright (c) 2022 Dow Jones & Company, Inc.
