Input Stories

The S&P Global U.S. Manufacturing PMI was 52.9 in June, improving to the highest reading in more than three years and the sixth consecutive month of growth. New orders also increased for the sixth successive month as a result of improved domestic and international demand, resulting in production rising for the first time in four months. Tariffs led to steep increases in both input and output costs in June, rising at the quickest rate in nearly three years. Nevertheless, manufacturers bought inputs at the fastest pace since April 2022 in an effort to build up inventory amid ongoing trade and price uncertainty.

Strengthened international demand led to an increase in new export orders, albeit the growth was limited by tariffs. The rise in input purchases helped drive an increase in inventory. On the other hand, because inventory growth has risen at such a steep pace to protect against supply-side disruptions from tariffs, growth is likely to be slower in the second half of the year. Increased input costs were connected widely to higher tariff rates, especially for steel, resulting in the sharp hikes in output charges.

Meanwhile, business confidence about the year ahead improved to the highest reading in four months, with firms hopeful that trade uncertainty will improve as the deadline for paused tariffs draws nearer. Improved sentiment, in conjunction with rising production, led to employment rising at the fastest pace in two-and-a-half years in June, with additional staffing capacity needed, as backlogs increased for the first time since September 2022.