S&P Global Flash U.S. Manufacturing PMI Drops to Four-month Low

The S&P Global Flash U.S. Manufacturing PMI fell for the second consecutive month from 53.9 to 53.8 in July, a four-month low. Factory production slowed to its lowest level since March, while new orders growth rose at its slowest pace since April. Meanwhile, manufacturing employment rebounded from a sharp drop in June.

Inventory growth slowed in July after surging in June. At the same time, supplier delivery times lengthened to the greatest extent since August 2022 and have worsened 11 consecutive months. Input and selling prices remained elevated as manufacturers’ input cost inflation cooled. Overall, price increases accelerated in July as input cost inflation rose to its highest level since May 2025 and selling price inflation to its steepest level since August 2022. 

Overall business activity increased in July, moving up from 52.9 to 53.6, an eight-month high. Further, the growth rate in the services sector improved, rising to an eight-month high as well. Overall, domestic demand for services drove the growth during the month. In line with the increase in demand, employment rose for the first time after declining in recent months.

Meanwhile, manufacturers’ optimism about future business conditions slipped in July to its lowest level since October. At the same time, service sector optimism improved to its highest level since September, aided by lower energy prices helping fuel customer spending power. Overall, business output expectations rose to an eight-month high as war-related disruptions continue to weigh on the outlook.