US Manufacturing Activity Contracts in July

The United States Manufacturing Purchasing Managers Index (PMI) has fallen to 49.8 in July from June's 52.9, marking the first time in 2025 that the sector has entered contraction territory, according to data released by S&P Global on Friday.

Challenges in New Orders and Export Markets

New orders saw only a marginal increase, with manufacturers citing client uncertainty, largely due to ongoing tariff issues. For the first time in three months, new export orders have declined, with notable decreases in sales to China, the European Union, and Japan.

Expert Insight on the Downturn

"The downturn at the start of the third quarter in part reflects the passing of a busy period of tariff-related inventory accumulation in prior months," explained Chris Williamson, Chief Business Economist at S&P Global Market Intelligence. He added, "Optimism about the year ahead has taken a knock as factories worry about reduced demand from customers, especially in export markets."