WASHINGTON (dpa-AFX) - Growth in U.S. manufacturing activity unexpectedly showed a continued slowdown in the month of July, according to a report released by the Institute for Supply Management on Thursday.
The ISM said its purchasing managers index dipped to 51.2 in July after edging down to 51.7 in June. While a reading above 50 still indicates growth in manufacturing activity, economists had expected the index to inch up to 52.0.
With the continued decrease, the purchasing managers index dropped to its lowest level since hitting 49.6 in August of 2016.
'Comments from the panel reflect continued expanding business strength, but at soft levels,' said Timothy Fiore, Chair of the ISM Manufacturing Business Survey Committee. 'July was the fourth straight month of slowing PMI expansion.'
The unexpected drop by the headline index was partly due to a significant slowdown in the pace of growth in production, as the production index tumbled to 50.8 in July from 54.1 in June.
The employment index also slumped to 51.7 in July from 54.5 in June, indicating a notably slower pace of job growth in the manufacturing sector.
On the other hand, the new orders index crept up to 50.8 in July from 50.0 in June, suggesting a modest demand expansion following one month of no change.
'Respondents expressed less concern about U.S.-China trade turbulence, but trade remains a significant issue,' Fiore said. 'More respondents noted supply chain adjustments as a result of moving manufacturing from China.'
The report also showed a continued contraction in prices, with the prices index sliding to 45.1 in July from 47.9 in June, which the ISM called an indication of lower overall systemic demand.
Next Monday, the ISM is scheduled to release a separate report on activity in the U.S. service sector in the month of July.
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