The July PMI Index, published by the Institute for Supply Management, fell for the fourth consecutive month to its lowest level in three years signaling a continuing slowdown in U.S. Manufacturing. The Index registered 51.2, down 0.5 from June, which is still indicative of growth, but at a minimal level (a reading above 50.0 indicates expansion). Inventories, Customers’ Inventories, Backlog of Orders, Prices, New Export Orders and Imports were all below 50.0 for July, indicating contraction. Only New Orders (50.8, up 0.8) and Supplier Deliveries (53.3, up 2.6) were in positive territory and increased. Based on the comments of some respondents, tariffs are a factor:
- “General business trends are continuing to show signs of weakness resulting from tariffs…” (Electrical Equipment, Appliances & Components)
- “All aspects of business remain strong, but we’re starting to see the frictional effect of tariffs on exports.” (Plastics & Rubber Products)
- “Business has slowed, but it is still steady and expected to pick up next month.” (Machinery)
- “There is a drop in demand for steel products…” (Fabricated Metal Products)
- “The economy is holding steady. All the uncertainty seems to be priced in…” (Food, Beverage & Tobacco Products)
- “Weakness in end markets accelerating rapidly.” (Chemical Products)
- “China tariffs continue to be a concern. The uncertainty of future tariffs involving China, Canada and Mexico is also a concern.” (Computer & Electronic Products)
