- Prior month 48.5
- Prices paid 52.9 versus 52.1 prior
- Employment 43.4 versus 49.3 last month
- New orders 47.4 versus 49.3 last month
- Production 45.9 versus 48.5 last month
- Supplier deliveries 52.6 versus 49.8 last month
- Inventories 44.5 versus 45.4 last month.
- Backlog of orders 41.7 versus 41.7 last month
- New export orders 49.0 versus 48.8 last month
- Imports 48.6 versus 48.5 last month
This is the lowest reading since November and marks the 20th contraction in the last 21 months for the sector.
None of the six largest manufacturing industries expanded in July, signaling broad-based weakness. Demand remains subdued as companies show reluctance to invest in capital and inventory.
Comments from survey respondents highlighted concerns about slowing consumer spending, inventory reductions, and uncertainty about the economic outlook.
The Fed will be watching closely to see if weakness spreads to the broader economy as manufacturing makes up only about 10% of the economy.
Comments in the report:
- Business is relatively flat — the same volume, but smaller orders.” [Chemical Products]
- “Demand continued to soften into the second half of the year. Supply chain pipelines and inventories remain full, reducing the need for overtime. Geopolitical issues between China and Taiwan as well as the election in November remain weighing concerns.” [Transportation Equipment]
- “Even though we are used to a seasonal reduction in business over the summer, consumer behavior is changing more than normal. Sales are lighter, and customer orders are coming in under forecasts. It seems consumers are starting to pull back on spending.” [Food, Beverage & Tobacco Products]
- “Availability of parts is good, with small exceptions of missing materials here and there. Ordering is still well below typical levels as we continue to burn down inventory of raw goods, with ‘normal’ ordering trends expected to return sometime in the second half of 2024.” [Computer & Electronic Products]
- “It seems that the economy is slowing down significantly. The number of sales calls received from new suppliers is increasing significantly. Our own order backlog is also diminishing. We are hoping for an increase in customer demand, or we will possibly need to make organizational changes.” [Machinery]
- “Unfortunately, our business is experiencing the sharpest decline in order levels in a year. We were well below our budget target in June; as a result, it was the first month this year that we had negative net income.” [Fabricated Metal Products]
- “Business is slowing, and we are taking cost actions.” [Electrical Equipment, Appliances & Components]
- “Some markets that are usually unwavering are showing weakness. Weather is the common factor, but only so much.” [Nonmetallic Mineral Products]
- “Our sales forecast for July and August are slow, but we’re making every attempt to remedy that situation. Our medical end-user customers continue to meet their forecasts, which is promising.” [Textile Mills]
- “Elevated financing costs have dampened demand for residential investment. This has reduced our need for component products and inventory.” [Wood Products]
