Prior month 48.5Prices paid 52.9 versus 52.1 priorEmployment 43.4 versus 49.3 last monthNew orders 47.4 versus 49.3 last monthProduction 45.9 versus 48.5 last monthSupplier deliveries 52.6 versus 49.8 last monthInventories 44.5 versus 45.4 last month.Backlog of orders 41.7 versus 41.7 last monthNew export orders 49.0 versus 48.8 last monthImports 48.6 versus 48.5 last month
This is the lowest reading since November and marks the 20th contraction in the last 21 months for the sector.
None of the six largest manufacturing industries expanded in July, signaling broad-based weakness. Demand remains subdued as companies show reluctance to invest in capital and inventory.
Comments from survey respondents highlighted concerns about slowing consumer spending, inventory reductions, and uncertainty about the economic outlook.
The Fed will be watching closely to see if weakness spreads to the broader economy as manufacturing makes up only about 10% of the economy.
Comments in the report:
Business is relatively flat — the same volume, but smaller orders.” [Chemical Products]“Demand continued to soften into the second half of the year. Supply
chain pipelines and inventories remain full, reducing the need for
overtime. Geopolitical issues between China and Taiwan as well as the
election in November remain weighing concerns.” [Transportation
Equipment]“Even though we are used to a seasonal reduction in business over
the summer, consumer behavior is changing more than normal. Sales are
lighter, and customer orders are coming in under forecasts. It seems
consumers are starting to pull back on spending.” [Food, Beverage &
Tobacco Products]“Availability of parts is good, with small exceptions of missing
materials here and there. Ordering is still well below typical levels as
we continue to burn down inventory of raw goods, with ‘normal’ ordering
trends expected to return sometime in the second half of 2024.”
[Computer & Electronic Products]“It seems that the economy is slowing down significantly. The number
of sales calls received from new suppliers is increasing significantly.
Our own order backlog is also diminishing. We are hoping for an
increase in customer demand, or we will possibly need to make
organizational changes.” [Machinery]“Unfortunately, our business is experiencing the sharpest decline in
order levels in a year. We were well below our budget target in June;
as a result, it was the first month this year that we had negative net
income.” [Fabricated Metal Products]“Business is slowing, and we are taking cost actions.” [Electrical Equipment, Appliances & Components]“Some markets that are usually unwavering are showing weakness.
Weather is the common factor, but only so much.” [Nonmetallic Mineral
Products]“Our sales forecast for July and August are slow, but we’re making
every attempt to remedy that situation. Our medical end-user customers
continue to meet their forecasts, which is promising.” [Textile Mills]“Elevated financing costs have dampened demand for residential
investment. This has reduced our need for component products and
inventory.” [Wood Products]
This article was written by Adam Button at www.forexlive.com.
