News

In July, manufacturers in the U.S. faced worsening business conditions. New orders fell for the first time in three months. Despite a marginal rise in production from working through outstanding business and replenishing finished goods stocks, overall growth was minimal and was the slowest rate in six months due to the drop in new orders. The rise in inventories was influenced by the drop in sales, leading to the strongest post-production inventory accumulation since November 2022.

Employment increased for the seventh consecutive month, though at the slowest pace since January, driven by confidence in future production and the need to replace workers. Business sentiment improved slightly, buoyed by hopes that the current demand slump would be temporary and improve after the presidential election.

Input costs rose sharply in July, driven by higher energy, freight, labor and raw material prices, although the rate of inflation eased to a four-month low. Manufacturers increased their selling prices only marginally to stay competitive. Purchasing activity declined for the second month, reducing input stocks for the fifth consecutive month. Delivery times were impacted by labor and material shortages and shipping delays.