U.S. manufacturing operating conditions improve for the first time since February

July PMITM data signalled a further upward movement in the headline index, as manufacturers registered the first improvement in operating conditions since February following the outbreak of the coronavirus disease 2019 (COVID-19). Overall growth was marginal but stemmed from the first upturns in output and new orders for five months, as client demand picked up. The contraction in employment softened despite further evidence of spare capacity as new sales rose. Greater optimism in the outlook was also reflected in an improvement in business confidence.

At the same time, input prices rose solidly amid increased demand for inputs, whilst firms partially passed on higher costs to clients through an uptick in charges.  

The seasonally adjusted IHS Markit final U.S. Manufacturing Purchasing Managers’ Index™ (PMI™) posted 50.9 at the start of the third quarter, up from 49.8 in June but slightly lower than the previously released 'flash' estimate of 51.3. The latest figure signalled a marginal improvement in the performance of the U.S. manufacturing sector, the first since February.

The seasonally adjusted IHS Markit final U.S. Manufacturing Purchasing Managers’ Index™ (PMI™) posted 50.9 at the start of the third quarter, up from 49.8 in June but slightly lower than the previously released 'flash' estimate of 51.3. The latest figure signalled a marginal improvement in the performance of the U.S. manufacturing sector, the first since February.

Reflecting the reopening of many customers, new orders increased for the first time since February in July. The rate of growth was modest, despite signalling a stark contrast to the marked decline seen in April. Although total sales expanded, new export orders fell fractionally as foreign client demand struggled to gain momentum amid the gradual reopening of global economies following the COVID-19 pandemic.