US Manufacturing Activity Declines Slightly in July

The Institute for Supply Management (ISM) reported a slight deterioration in the US manufacturing sector's activity in July, with the Purchasing Managers' Index (PMI) dropping to 48% from 49% in June. This marks a concerning trend for the sector, as new orders have now contracted for six consecutive months, although there was a minor improvement with the indicator rising by 0.7 percentage points to 47.1%.

Production and Employment Trends

On a brighter note, production saw an expansion, increasing by 1.1 points to 51.4%. However, the employment index wasn't as fortunate, falling by 1.6 points to 43.5%. Additionally, the price index experienced a significant decline, dropping by 4.9 percentage points to 64.8%.

Expert Insight on the Sector's Health

"The manufacturing economy is showing signs of stress, with 79% of the sector’s GDP contracting in July, a sharp increase from 46% in June," noted ISM Chair Susan Spence. She highlighted that 31% of GDP is now strongly contracting, a rise from 25% in June, indicating deepening challenges within the sector.