The Global Manufacturing Purchasing Manager’s Index (PMI) fell in July to 55.4 against 55.5 in June, with a number over 50 showing improvement against the previous month, according to JP Morgan and IHS Markit Research.
The economy continued expanding in July though the increase in new orders and output retreated with indexes of 55.3 and 54.3, compared to 55.7 and 54.4 in June, respectively. The contraction was attributed to supply-chain challenges and increased transportation costs that saw companies’ operating confidence falling marginally.
New export orders also fell from 53.2 in June to 52.7 in July as future output slipped to 64.2 in July from 66.1 the preceding month. With inflation surfacing, the input price index rose to 71.2 in July from 70.7 in June while output prices slowed their rate at 60.3 in July against 60.8 the previous month.
The manufacturing PMI for Eurozone countries and the USA were near or above a 60 index but China remained near 50 while Mexico encountered a slight contraction at a below-50 index. The Eurozone Manufacturing PMI was at 62.8 in July, contracted from June’s final 63.4 as output and order growth rates slowed down and inflation rates rose as supply chain disturbances continued. The region has recorded uninterrupted months of growth since July 2020. The three countries with the strong PMI’s in July were the Netherlands at 67.4, Germany at 65.9, and Austria at 63.9 followed by Italy with an index at 60.3, Spain at 59, France at 58, and Greece at 57.4.
US Manufacturing PMI in July was 63.4 in July, up from 62.1 the preceding month. The economic growth accelerated in the month on new orders, improved output, and increased employment.
The US economy is encountering upward cost pressures on efforts of distributors and end-users to restock spent inventories yet facing record shortages. The supply chain disruption is also motivating some to place orders in advance in hopes of maintaining a constant inflow of materials and goods needed in-house.