The US manufacturing sector continued to grow in July but at a slower rate than June and at the slowest pace since June 2020, according to the Institute for Supply Management’s “July Manufacturing PMI” report.
“Panelists are now expressing concern about a softening in the economy, as new order rates contracted for the second month amid developing anxiety about excess inventory in the supply chain,” said Timothy Fiore, chair of the ISM’s Manufacturing Business Survey Committee.
In July, the Manufacturing PMI was at 52.8%; in comparison, the reading was 52.4% in June 2020. Readings above 50% indicate expansion.
The employment index portion of the PMI shrunk for the third month in a row. Its reading for July was 49.9%, an improvement from June’s reading of 47.3%, but still indicating contraction.
However, companies taking part in the report indicated they are continuing to hire at strong rates, Fiore said. In addition, there were few indications of layoffs, hiring freezes or headcount reduction through attrition. However, there were reports of higher rates of quits.
“Although an overwhelming majority of survey panelists again indicate their companies are hiring, they are still struggling to meet labor management plans. Improvement signs are mixed,” he said.