U.S. ISM manufacturing index seems to have dropped further in August

U.S. ISM manufacturing index might have dropped further in August, following a rise in May and June. The index had risen 2.4 points in May and June combined. It dropped to 52.6 in July from June’s 53.2. It is expected to have dropped further in August to about 51.5 said Societe Generale in a research note. The regional factory surveys that have been released until now have indicated certain weakening in manufacturing activity in the month.

For instance, the ISM-adjusted Philadelphia Fed and Richmond Fed readings each reversed in August. The former fell to 46.8 in August from 51.4 in July, whereas the latter dropped to 50.2, in line with June’s reading of 50.4.

On the contrary, the ISM-adjusted Empire State index was up by around a point but continued to be extremely weak at 50.1. The average ISM-adjusted reading for the regional measures remained at just 49 in August, or just about two points lower than its July figure. But as the ISM’s new orders index remained well at 57 in July, the decline in the national manufacturing measure is expected to be smaller, according to Societe Generale.