2023-09-01 14:44:19
(Washington) Manufacturing activity in the United States contracted in August, for the tenth month in a row, but less than expected and less than in July, according to data published Friday by the professional federation ISM.
The index measuring this activity gained 1.2 percentage points to 47.6% once morest 46.4 the month before. Analysts were betting on a lesser improvement at 46.7%.
Below the 50% mark, the index means that activity is contracting. When the index is above 50%, the activity, on the contrary, is growing.
Of the six largest manufacturing industries, three grew in August compared to just one in July.
These are transportation, food, and petroleum and coal products.
“The manufacturing sector has fallen further, but the rise in the index indicates a slower pace of contraction,” said Timothy Fiore, the head of the survey, quoted in a press release.
“August Composite Index Reflects Appropriate Management of Production by Companies as Orders Weakness Continues; however the month-on-month increase is a sign of improvement,” the economist added.
Mr Fiore pointed out that the price index remained “in declining territory”.
Within the index, orders declined to 46.8 from 47.3 but employment rose to 48.5, a high since May.
Inventories are down at 44 from 46.1 and production broke even at 50 from 48.3 in July.
Exports have improved very marginally and also remain in contraction at 46.5 once morest 46.2.
“The ISM Manufacturing Index improved more than expected in August to reach its best level since February,” commented Rubeela Farooqi, economist for HFE Notes.
“But it remains below 50 for a tenth month in a row,” she lamented.
“While relocating supply networks and investing in domestic manufacturing capacity can support industrial activity, rising borrowing costs and further tightening of credit conditions might be an impediment to future,” warned the economist.
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