US Business Activity Growth Cools as Manufacturing Weakens
The June Composite Purchasing Managers Index (PMI) for the combined U.S. manufacturing and services sector fell to a three-month low, according to data released by S&P Global on Thursday. The decline was primarily driven by a greater contraction in manufacturing activity. A PMI above 50 indicates an increase in activity.
Key points from the report include a 1.3-point month-on-month drop in the Composite PMI preliminary to 53, which is slightly below the median forecast of 53.5. The Services PMI also fell to 54.1, slightly below the market forecast of 54. On the other hand, the Manufacturing PMI fell to 46.3, significantly below the market forecast of 48.5.
Inflation was a mixed bag, with the purchase price index for the manufacturing industry shrinking for the first time in about three years. However, the comparable index for the service industry reached its highest level in five months. The overall receipt price index fell to its lowest level since 2020.
Despite the decline in manufacturing activity, the service industry PMI remains high. Demand was strong, and the expectations index reached its highest level in about a year. However, the manufacturing PMI is in a contraction zone and has deteriorated further. It reached its lowest level in six months, and the new orders index experienced a sharp drop similar to May 2020.
Chris Williamson, chief business economist at S&P Global Market Intelligence, commented on the situation, stating, “Growth is still dependent on spending in the services sector. How resilient the services sector can be in the face of expectations.” Williamson emphasized the importance of the services sector in driving overall economic growth.
The report highlights the challenges faced by the U.S. economy, with manufacturing activity weakening and the services sector remaining resilient. The impact of these trends on future economic growth remains to be seen.
Original title: US Business Activity Growth Cools as Manufacturing Weakens (excerpt)
Source: Bloomberg
Date: 2023-06-23
Hashtags: #U.S #Composite #PMI #drops #June #manufacturing #worsens #Global
What are the implications of the weakening manufacturing sector on future economic growth in the US
US Business Activity Loses Steam as Manufacturing Slumps
Business activity in the United States witnessed a slowdown in growth as manufacturing sector weakened, according to the latest data released by S&P Global. The June Composite Purchasing Managers Index (PMI), which combines manufacturing and services sectors, dropped to a three-month low. The decline was driven by a significant contraction in manufacturing activity. A PMI above 50 indicates an increase in activity.
Key findings from the report reveal a 1.3-point month-on-month decline in the Composite PMI to 53, slightly below the median forecast. The Services PMI also fell to 54.1, slightly below market expectations. On the other hand, the Manufacturing PMI fell to 46.3, significantly lower than predicted.
Inflationary pressures were mixed, with the manufacturing industry witnessing a decline in the purchase price index for the first time in three years. However, the service industry’s comparable index reached its highest level in five months. The overall receipt price index fell to its lowest level since 2020.
Despite the drop in manufacturing activity, the service industry PMI remains relatively strong. Demand remains robust, and the expectations index reached its highest level in a year. However, the manufacturing PMI is in a contraction zone and has further deteriorated. It hit its lowest level in six months, with the new orders index experiencing a sharp decline similar to May 2020.
Chris Williamson, chief business economist at S&P Global Market Intelligence, expressed his views on the situation, emphasizing the significance of the services sector in driving overall economic growth. He said, “Growth is still reliant on spending in the services sector. The resilience of the sector in the face of expectations will determine its future performance.”
The report underscores the challenges faced by the US economy, with manufacturing activity weakening while the services sector remains resilient. The impact of these trends on future economic growth is yet to be determined.
Original title: US Business Activity Growth Cools as Manufacturing Weakens (excerpt)
Source: Bloomberg
Date: 2023-06-23
Hashtags: #U.S #Composite #PMI #drops #June #manufacturing #worsens #Global
The latest PMI report indicates a cooling off in US business activity growth, particularly in the manufacturing sector. This raises concerns about the overall economic recovery, highlighting the need for targeted interventions to support this vital sector.