US production sees decline last month for first time since February

(MENAFN) According to a report by S&P Global released on Tuesday, US production experienced a decline in August for the first time in seven months. The report highlights that sales continued to decrease, reflecting increasing concerns about demand weakness in the manufacturing sector.

The S&P Global US Manufacturing Purchasing Managers’ Index (PMI) fell to 47.9 in August, down from 49.6 in July, marking the second consecutive month below the neutral 50.0 mark. This decline was sharper than the anticipated reading of 48.0, with a PMI value above 50 indicating expansion and below 50 signaling contraction.

Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, noted that the further drop in the PMI suggests the manufacturing sector is increasingly acting as a drag on the economy midway through the third quarter. He explained that slower-than-expected sales have led to rising inventories of unsold goods, while a lack of new orders has forced factories to reduce production for the first time since January.

Additionally, the report indicated that the pace of input cost inflation accelerated to a 16-month high, with output prices also rising at a faster rate. These factors are contributing to the manufacturing sector's struggles as it navigates weaker demand and higher costs.

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