Manufacturing in the United States saw a further decline in June, according to a private survey released on Monday, reaching a low not seen since the aftermath of the first wave of the COVID-19 outbreak, as demand dwindles with price pressure easing.
The manufacturing purchasing managers’ index (PMI) reported by the Institute for Supply Management (ISM) fell to 46.0 in June, the lowest reading since May 2020, from 46.9 in May. The PMI has now been below 50, indicating manufacturing contraction, for eight consecutive months, and it is the longest such period since the Great Recession.
Reuters’ survey of economists predicted a slight increase to 47 for the index.
As of last week’s statistics release, the manufacturing sector, which accounts for 11.1% of GDP, fell at an annualized pace of 5.3% in the first quarter.
Since March 2022, when the US central bank began its swiftest monetary policy tightening campaign in more than 40 years, the Federal Reserve has increased interest rates by 500 basis points, putting a significant strain on the manufacturing sector. Credit-purchased goods are losing ground to cash-paying services. In addition, businesses are likewise taking precautions with their stock levels in anticipation of decreased customer demand.
