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In July, global manufacturing activity fell back into contraction territory, dropping from 50.4 to 49.7. Output and new orders also dropped back into contraction in July after expanding in June. New export orders continued to decline and at a faster pace than the prior month. After businesses frontloaded in advance of increased tariff rates in the first half of the year, global manufacturing stalled in July amid reduced demand due to tariffs and an unwind of the previously frontloaded production.

India, Ireland, Vietnam and Spain had the highest PMI readings in July. On the other hand, China, the U.K., Brazil, Mexico and the U.S. were some of the larger nations to register declines in activity. The modest downturn in manufacturing output was seen across the consumer, intermediate goods and investment goods categories.

Additionally, manufacturing employment fell for the 12th consecutive month in July and at a faster rate. Although staffing levels sank in the U.S., China and Eurozone, they rose in Japan, India and Brazil. Meanwhile, price pressures remained relatively stable, with developed nations experiencing sharper increases in both input and output costs than emerging nations.