U.S. manufacturing continues to contract in June amid weak demand, lower input prices
(MENAFN) In June, U.S. manufacturing activity continued its decline for the third consecutive month, according to the Institute for supply Management (ISM). The ISM's purchasing managers' index (PMI) for the manufacturing sector dropped to 48.5 from 48.7 in May. This index, which marks a reading below 50 as contractionary, reflects ongoing challenges in the manufacturing sector, which constitutes approximately 10.3 percent of the U.S. economy.
Economists had anticipated a slight improvement with a PMI forecast of 49.1, highlighting the unexpected persistence of contractionary conditions. The manufacturing sector faces multiple pressures, including higher interest rates and diminished demand for goods, contributing to the sustained decline in production levels.
Data released by the government last week underscored the sector's struggles, revealing a 4.3 percent year-on-year contraction in the manufacturing industry during the first quarter, particularly in durable goods production. Amid these challenges, the ISM's sub-index for new future orders increased marginally to 49.3 in June from 45.4 in April, suggesting cautious optimism for future demand despite current setbacks.
However, the production sub-index declined to 48.5 in June from 50.2 in May, indicating a slowdown in manufacturing output. Employment in the sector also saw a downturn after a brief uptick in May, with factories resorting to layoffs and hiring freezes amid reduced production levels and economic uncertainties.
The latest ISM report signals ongoing struggles within the U.S. manufacturing sector, influenced by both domestic economic conditions and global market dynamics. The data further underscores the challenges faced by manufacturers as they navigate a landscape of fluctuating demand and economic uncertainties impacting production and employment.
MENAFN02072024000045015682ID1108398457
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.