The US ISM manufacturing index fell to 51.5 in August, posting a larger decline on the month. The decline was led by the components of the survey that tend to be most indicative of future activity.
As such, the August report looks confirming recent view that output and employment for the domestic manufacturing sector are likely to remain sluggish through the end of the year.
New orders at 51.7 and production at 51.7 both fell in August, as expected given earlier reading from regional surveys. Employment at 51.2 softened as well, to the lowest reading since March.
"Export demand continues to contract at 46.5, which is likely a result of the continued strength in the dollar. On balance, the weaker-than-expected headline reading and broad-based softness in the August manufacturing ISM suggest that the goods-producing sector is likely to remain subdued in Q3", says Barclays.
