| Consensus | Consensus Range | Actual | Previous | |
|---|---|---|---|---|
| Index | 49.5 | 49.5 to 49.5 | 49.8 | 52.9 |
Highlights
The S&P Global US Manufacturing Purchasing Managers' Index came in at 49.8 in July, compared to 52.9 in June, and just above expectations for 49.5 in the Econoday survey of forecasters. Operating conditions worsened as demand stalled, and the tariffs continue to loom over the manufacturing sector.
Weakness in the headline PMI reflected some softness in market demand, with new orders up only fractionally and to the weakest degree of the year so far, the report said. Panelists pointed to the continuation of client uncertainty, especially in relation to tariffs.
New orders were stagnant, with export orders in particular down for the first time in three months, with manufacturers in some instances reporting lower sales with key trading partners like China, the European Union and Japan.
Employment declined in response, whilst inventory control also added to the deteriorating manufacturing picture with firms reducing their stock holdings as previous efforts to front run tariffs dissipated, it added.
As for prices, the sharp rise in input costs continued due to tariffs although at a slower rate compared to June. Meanwhile selling prices continued to increase markedly, rising to the second greatest degree since November 2022.
Weakness in the headline PMI reflected some softness in market demand, with new orders up only fractionally and to the weakest degree of the year so far, the report said. Panelists pointed to the continuation of client uncertainty, especially in relation to tariffs.
New orders were stagnant, with export orders in particular down for the first time in three months, with manufacturers in some instances reporting lower sales with key trading partners like China, the European Union and Japan.
Employment declined in response, whilst inventory control also added to the deteriorating manufacturing picture with firms reducing their stock holdings as previous efforts to front run tariffs dissipated, it added.
As for prices, the sharp rise in input costs continued due to tariffs although at a slower rate compared to June. Meanwhile selling prices continued to increase markedly, rising to the second greatest degree since November 2022.
Definition
Based on monthly questionnaire surveys of selected companies, the Purchasing Managers' Manufacturing Index (PMI) offers an advance indication on month-to-month activity in the private sector economy by tracking changes in variables such as production, new orders, stock levels, employment and prices across manufacturing industries. The final index for the current month is released roughly a week after the flash.
Description
Investors need to keep their fingers on the pulse of the economy because it dictates how various types of investments will perform. By tracking economic data such as the ISM manufacturing index in the U.S. and the Markit PMIs in the U.S. and elsewhere, investors will know what the economic backdrop is for the various markets. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers less rapid growth and is extremely sensitive to whether the economy is growing too quickly and causing potential inflationary pressures.
The Markit PMI manufacturing data give a detailed look at the manufacturing sector, how busy it is and where things are headed. Since the manufacturing sector is a major source of cyclical variability in the economy, this report has a big influence on the markets. And its sub-indexes provide a picture of orders, output, employment and prices.
Markit originally began collecting monthly Purchasing Managers' Index (PMI) data in the U.S. in April 2004, initially from a panel of manufacturers in the U.S. electronics goods producing sector. In May 2007, Markit's U.S. PMI research was extended out to cover producers of metal goods. In October 2009, Markit's U.S. Manufacturing PMI survey panel was extended further to cover all areas of U.S. manufacturing activity. Back data for Markit's U.S. Manufacturing PMI between May 2007 and September 2009 are an aggregation of data collected from producers of electronic goods and metal goods producers, while data from October 2009 are based on data collected from a panel representing the entire U.S. manufacturing economy. Markit's total U.S. Manufacturing PMI survey panel comprises over 600 companies.
The Markit PMI manufacturing data give a detailed look at the manufacturing sector, how busy it is and where things are headed. Since the manufacturing sector is a major source of cyclical variability in the economy, this report has a big influence on the markets. And its sub-indexes provide a picture of orders, output, employment and prices.
Markit originally began collecting monthly Purchasing Managers' Index (PMI) data in the U.S. in April 2004, initially from a panel of manufacturers in the U.S. electronics goods producing sector. In May 2007, Markit's U.S. PMI research was extended out to cover producers of metal goods. In October 2009, Markit's U.S. Manufacturing PMI survey panel was extended further to cover all areas of U.S. manufacturing activity. Back data for Markit's U.S. Manufacturing PMI between May 2007 and September 2009 are an aggregation of data collected from producers of electronic goods and metal goods producers, while data from October 2009 are based on data collected from a panel representing the entire U.S. manufacturing economy. Markit's total U.S. Manufacturing PMI survey panel comprises over 600 companies.
