Business Maverick: US Manufacturing Expands at Slowest Pace in Two Years

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US manufacturing activity continued to cool in July as more factories dialed back production in the face of shrinking orders and rising inventories.

The Institute for Supply Management’s gauge of factory activity eased to 52.8, the lowest level since June 2020, from 53 a month earlier, according to data released Monday. Readings above 50 indicate expansion, and the latest figure compared with a median projection of 52 in a Bloomberg survey of economists.

The ISM factory inventories index rose to 57.3, the highest since 1984 and suggesting stockpiles are mounting at more manufacturers. While many producers have been adding to inventories in the event of further supply-chain disruptions, the increase may also suggest some of the build is unintended. The ISM and S&P Global manufacturing data are consistent with a general slowdown in other parts of the world. European factory activity slumped last month and manufacturing output in Asia continued to weaken.

“Chip shortages remain; however, the Covid-19 lockdowns in China are presenting even worse supply issues.” – Transportation Equipment

 

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