Last updated on July 2nd, 2019 at 09:11 am
The manufacturing industry continued to grow in July, albeit at a slower pace, as the Institute for Supply Management’s PMI dropped to 52.6 percent.
Any reading of more than 50 indicates growth in the sector and July marked the fifth straight month in positive territory for the index. The reading was down slightly from 53.2 percent in June, which was the highest reading since early 2015.
Survey respondents highlighted a number of concerns and challenges facing their businesses. Those included the potential impact of Brexit, slowing retail sales in machinery, oversupply and poor weather in the wood products industry, and slowing demand and production in the transportation equipment industry.
A petroleum and coal product respondent said the oil and gas industry continued to adjust staff levels to match oil prices at $40 to $50 per barrel.
“This price range is seen as the new normal for the foreseeable future,” the respondent said.
A respondent in plastics and rubber products said there “seems to be a bit more optimism in the markets. But the U.S. presidential race might dampen the mood.”
Some of the signs of optimism in the report included a stronger than expected end to the second quarter for a computer and electronic products respondent, strong demand in nonmetallic mineral products and increasing international capital orders in fabricated metal products.
New orders continued to grow in July, but slowed slightly to 56.9, and production picked up speed, reaching 55.4.
Potentially concerning readings from the report included a contraction in employment, which came in at 49.4. Order backlogs also moved into contraction territory, dropping to 48 from 52.5.
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