U.S. Manufacturing Activity Slowed Sharply in June -- S&P Global
By Xavier Fontdegloria
Factory activity in the U.S. lost further momentum in June as
output stalled and new orders contracted amid weaker client demand,
data from a purchasing managers survey showed Friday.
The S&P Global U.S. manufacturing PMI fell to 52.7 in June
from 57.0 in May, slightly above the preliminary reading of 52.4,
signaling that factory activity grew at its slowest pace in almost
two years. A reading above 50.0 points to an expansion in activity,
while a figure below that threshold points to a contraction.
Economists polled by The Wall Street Journal expected the PMI to
come in at 52.0.
The data suggest that the manufacturing sector is acting as a
drag on economic growth and this is likely to intensify in the
summer, said Chris Williamson, chief business economist at S&P
"Forward-looking indicators such as business expectations, new
order inflows, backlogs of work and purchasing of inputs have all
deteriorated markedly to suggest an increased risk of an industrial
downturn," he said.
The drop in the index was driven mainly by a decline in new
orders for manufacturing firms, the first decrease in more than two
years. Firms reported that inflationary pressures, weak client
confidence in the outlook and supply-chain disruptions drove the
decline, S&P Global said.
The decline in demand eased some pressure from supply chains and
prices, according to the survey. Average supplier delivery times
lengthened to the smallest extent since November 2020, while input
and output inflation moderated.
"Some welcome news is that the drop in demand for inputs has
brought some pressure off supply chains and calmed prices for a
wide variety of goods, which should help alleviate broader
inflationary pressures in coming months," Mr. Williamson said.
Write to Xavier Fontdegloria at firstname.lastname@example.org
(END) Dow Jones Newswires
July 01, 2022 10:13 ET (14:13 GMT)
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