U.S. manufacturing operating conditions rebound in July, PMI index rose to 50.9
U.S. manufacturing operating conditions rebound for the first time since February. The PMI data hinted at a further upward movement in the headline index, as manufacturers recorded the first rebound in operating conditions since February following the outbreak of the COVID-19 disease.
The seasonally adjusted IHS Markit U.S. manufacturing PMI index rose to 50.9 at the beginning of the third quarter from June’s 49.8. Output rose only modestly in July, although the first growth in production since February. Where a rise was seen, companies attributed to the resumption of operations at manufacturers and their clients. Some also noted that demand also started picking up.
Reflecting the reopening of several customers, new orders rose for the first time since February in July. The pace of growth was modest, in spite of hinting at a stark contrast to the marked dropped seen in April. Even though total sales grew, new export orders dropped slightly as foreign client demand struggled to gain momentum in the midst of the gradual reopening of global economies after the COVID-19 pandemic.
The resumption of operations at manufacturers globally pushed demand for inputs up, with companies underlining that supplier shortages had driven cost burdens higher. The pace of input price inflation was strong overall and the most rapid for five months. However, the rate of increase in output charges was only slight overall as firms sought to remain competitive and attract new clients.
In spite of historically weak demand conditions, firms were more positive about the outlook for output over the coming year. Sentiment among manufacturers reportedly stemmed from hopes of an upturn in new orders and a return to pre-pandemic output levels, and an end to the COVID-19 crisis. Positivity was strong, but some companies noted worries for the near-term future as virus cases rise again.