Manufacturing Purchasing Managers Index (PMI) in America fell to 52.8 in July. Although the result was above expectations, the index points out that the pace in the manufacturing sector has slowed down.
According to the Purchasing Managers Index (PMI) released yesterday in the US, growth in manufacturing companies remained at its lowest level in two years in July. According to the report of The Wall Street Journal, while commodity prices fell, inflationary pressures showed signs of cooling.
Manufacturing index of the Institute of Supply Management (ISM) in the USA was recorded as 52.8 in July. The decrease in new orders indicates that the demand for factory products has decreased.
LOWEST LEVEL SINCE JUNE 2020
The index hit its lowest level since June 2020 and was recorded at 53 last month. According to Bloomberg’s poll among economists, the expectation was that the value would be 52.
Values above 50 in the index indicate expansion compared to the previous month, while values below indicate contraction.
The ISM factory inventory index rose to 57.3, the highest level recorded since 1984, the Los Angeles Times reported. This indicates that stocks are increasing at more manufacturers. Although many manufacturers are adding to their stocks in response to supply chain problems, this may indicate that some of the production is too much.
While the data revealed concerns about a slowdown in the economy, new order rates also contracted in the second month.
THE S&P GLOBAL INDEX HAS A DECREASE
On the other hand, purchasing managers index announced by S&P Global also points to a slower growth due to weak demand. S&P Global’s index, which was determined as 52.7 in June, was reduced to 52.2 in July.
S&P Global says its spring growth spurt is rapidly reversing, and a more pessimistic outlook means companies are increasingly cautious about purchasing and stocks.
Both surveys reported that supply constraints are easing and cost inflation is at a slower pace. This is a new sign that inflation in the US may have hit a record high.
While raw material prices rose much more slowly in July, ISM’s price index fell by 18.5 points, the most since June 2010.
MANUFACTURING IS WEAKING GLOBALLY
PMI data recorded by other countries also show that the manufacturing sector has weakened globally.
Manufacturing indicator in China also declined in July due to strict Covid-19 restrictions and weak demand. China’s National Bureau of Statistics announced on the market that its official manufacturing purchasing managers index (PMI) had dropped to 49. The index was recorded at 50.2 in June. According to the median forecast in Bloomberg’s survey of economists, the expectation was that the index would be recorded as 50.3.
The eurozone’s manufacturing sector also contracted last month as factories grappled with high inflation, the Russia-Ukraine war and the energy bottleneck.
In the UK, PMI decreased from 52.8 in June to 52.1 in July. This was the lowest value in 25 months.
STRONG DECREASE IN TURKEY
Istanbul Chamber of Industry also announced the purchasing managers index (PMI) data for July yesterday. The Istanbul Chamber of Industry Turkey Manufacturing PMI, obtained from the monthly surveys of companies operating in the manufacturing industry, declined to 46.9 in July, remaining below the threshold value of 50 for the fifth month in a row.
Employment growth was limited, while raw material and ex-factory price increases slowed.
Manufacturing PMI compiled by S&P Global for the Istanbul Chamber of Industry (ICI) showed that the industry contracted for the fifth consecutive month.
Source From: Sozcu