A report from
the Institute for Supply Management (ISM) showed on Monday the U.S.
manufacturing sector’s activity shrank in July at a quicker pace than in the previous month.
The ISM's index
of manufacturing activity - the manufacturing PMI - checked in at 46.8 per cent
in July, down 1.7 percentage points from an unrevised June reading of 48.5 per cent.
The July reading pointed to the
contraction in the U.S. manufacturing sector for the fourth straight month and
at the steepest pace since November 2023.
Economists had predicted
the indicator to increase to 48.8 per cent.
According to
the report, the New Orders Index fell 1.9 percentage points to 47.4 per cent
last month, remaining in contraction territory for the fourth consecutive
month. In
addition, the Production Index plunged 2.6 percentage points to 45.9 per cent, staying in contraction territory for the
second straight month. The Employment
Index plunged 5.9 percentage points to 43.4 per cent, its lowest level since June
2020, indicating that
employment decreased in July for the second month in a row. Elsewhere, the Inventories Index
decreased 0.9 percentage point to 44.5 per cent, suggesting
manufacturing inventories contracted at a faster rate compared to the previous
month. Meanwhile, the Supplier Deliveries Index jumped 2.8 percentage points to 52.6
per cent, marking the first month of slower deliveries after four consecutive
months of faster deliveries. On
the price front, the Prices Index increased 0.8 percentage points to 52.9 per
cent, indicating raw materials prices rose in July for the seventh month after
eight straight months of declines.