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[News] U.S. Manufacturing PMI Continues to Contract, but Computer & Electronics Industry Rebounds Strongly
Summary:
- Manufacturing PMI slight uptick
- New orders and production sub-indices continue to decline
- Uneven demand recovery across sectors
The U.S. manufacturing PMI showed a slight uptick in August, according to data released by the Institute for Supply Management (ISM) on September 3rd while overall consumer demand continued to weaken. The manufacturing PMI for August registered at 47.2, a modest increase of 0.4 points from July, but it remained in contraction territory for the fifth consecutive month.
In terms of the component indices, the new orders and production indices fell to 44.6 (from 47.4) and 44.8 (from 45.9), respectively, while increases in the employment and inventory indices helped lift the overall PMI slightly. This reflects the ongoing restrictive monetary policy and uncertainty surrounding the U.S. presidential election, which have dampened corporate investment sentiment. The persistent weakness in demand has further driven down production, putting additional pressure on corporate profits.
However, not all industries are facing weak demand prospects. For instance, respondents in the food & tobacco, and computer & electronics industries noted that demand has shifted from the slowdown in the first half of the year to stable growth. Particularly, the computer & electronics sector was the only industry among the 17 covered by the survey that saw increases across new orders, production, backlogs, and inventory indices, indicating a more robust recovery in demand.
On the other hand, industries such as machinery, paper, and chemicals reported that various uncertainties are causing demand to cool, highlighting the uneven nature of demand recovery across sectors.
