S&P Global Manufacturing PMI final 49.8 versus 49.5 preliminary

Chris Williamson, Chief Business Economist at S&P
Global Market Intelligence

“July saw the first deterioration of manufacturing
operating conditions since last December as
tariff worries continued to dominate the business
environment.

“The downturn at the start of the third quarter in part
reflects the passing of a busy period of tariff-related
inventory accumulation in prior months. Factories
reported little change in inflows of new orders and
reduced stock holdings of both raw materials and
finished goods in July. This comes after companies had
built up inventories in May and June amid concerns over
higher import prices and worsening supply availability
resulting from tariff hikes.

“Input prices continued to rise at a steep rate, with these
higher costs often being passed on to customers to
drive another month of elevated selling price inflation,
but there are signs that these price pressures may have
peaked back in June.
“Optimism about the year ahead has meanwhile taken
a knock as factories worry about reduced demand
from customers, especially in export markets, and the
inflationary impact of tariffs. Employment consequently
fell as factories trimmed headcounts amid concerns
over rising costs and lower sales.”