U.S. Manufacturing Activity Rose at Fresh Record Pace in July -- IHS Markit
By Xavier Fontdegloria
The U.S. manufacturing sector accelerated its expansion pace in
July, growing at the highest level in at least 14 years, amid
unprecedented supplier shortages and inflation pressures.
The final reading for the U.S. Manufacturing Business Activity
PMI for July was 63.4, a fresh record-high, data from IHS Markit
showed Monday. In June, the index came in at 62.1 while July's
preliminary estimate was at 63.1.
The reading beat estimates from economists polled by The Wall
Street Journal, who expected the PMI to come in at 63.1.
The indicator suggests that the manufacturing economy is
expanding solidly, as it is well-above the 50-point level that
separates expansion from contraction.
"July saw manufacturers and their suppliers once again struggle
to meet booming demand, leading to a further record jump in both
raw material and finished goods prices," said Chris Williamson,
chief business economist at IHS Markit.
Output continued to lag well behind order book growth to one of
the greatest extents in the survey's 14-year history, leading to a
near-record build-up of uncompleted orders, he said.
The rise of the headline figure was driven by the expansion in
production, an upturn reportedly linked to stronger client demand
and efforts to clear backlogs of work. New orders also rose at a
robust rate, IHS Markit said.
However, unprecedented supplier shortages and delays continued
to exert upward pressure on input costs and stymie firms' ability
to process incoming new work, the report said.
"Capacity is being constrained by yet another unprecedented
lengthening of supply chains, with delivery delays reported far
more widely in the past two months than at any time prior in the
survey's history," Mr. Williamson said.
Price pressures kept building up, with both the rate of cost
inflation and selling prices being the sharpest on record. The
uptick in output charges was overwhelmingly attributed to efforts
to pass through higher costs, IHS Markit said.
Write to Xavier Fontdegloria at firstname.lastname@example.org
(END) Dow Jones Newswires
August 02, 2021 10:19 ET (14:19 GMT)
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