They forecast that the ISM’s manufacturing index will slip to 53 last month from 53.2 in June.
Advertisement
The employment index fell last month to 49.4 from 50.4 in June, signaling a return to contraction in July.
The ISM report’s Employment Index, meanwhile, returned below the 50 percent threshold after creeping above that total for the first time in six months in June.
The U.S. manufacturing sector has stumbled in the face of a strong dollar, which makes exports more expensive for foreign customers, and low oil prices that have squeezed domestic energy producers.
“Overall, this suggests that the manufacturing sector is continuing to gradually recover”, Andrew Hunter, U.S. economist at Capital Economics, wrote in a research note. But he said continuing global economic weakness means that “a strong recovery in manufacturing activity remains unlikely in the near term”.
The drop in the headline index was “pretty much noise-level”, with overall conditions in the manufacturing sector little changed since the Brexit vote, said Bradley Holcomb, who oversees the ISM survey.
UNCERTAINTY: Britain’s June 23 vote to leave the European Union has created big uncertainty for American manufacturers.
USA construction spending fell for a third-straight month in June with spending on nonresidential construction dropping by the largest amount in six months.
The economy expanded at an annual pace of just 1.2 percent in the April-June quarter after a sluggish 0.8 percent and 0.9 percent rate in the prior two quarters. July’s report showed a decline of 1 percentage point to 49.4 percent. Look for better job growth in the months to come, particularly if manufacturers are truly seeing better demand and production growth. The year-over-year decline largely reflected a sharp fall in mining output; manufacturing production was up 0.4% in June compared with a year earlier.
Companies in the US that offer services, such as health care, retail goods and entertainment, grew, albeit at a slightly more subdued pace, in July, though they are not adding as many new workers as they were at the end of past year, according to a survey of senior executives.
While the ISM said the business activity index also edged down to 59.3 in July from 59.5 in June, the new orders index ticked up to 60.3 from 59.9.
Advertisement
Information for this article was contributed by Paul Wiseman and Martin Crutsinger of The Associated Press and by Michelle Jamrisko of Bloomberg News.
