US manufacturing sector hovers at lowest level in 2 years

By Ovunc Kutlu

ANKARA (AA) - The American manufacturing sector continued to slow in July, hovering around its lowest level in two years, according to a report released Thursday by the US-based financial services company S&P Global on.

The Manufacturing purchasing managers' index (PMI), which measures the activity of managers in the manufacturing sector, further fell 0.7 points from the previous month to 51.5 in July -- its lowest since July 2020.

While analysts expected PMI to come in at 51.3, the figure is down from 52.2 in June.

"US factory production was down for a second month running in August, with demand for goods having now fallen for three straight months amid the ongoing impact of soaring inflation, supply constraints, rising interest rates and growing economic uncertainty about the economic outlook," Chris Williamson, chief business economist at S&P Global Market Intelligence, said in a statement.

"Worryingly, the sharpest drop in demand was recorded for business equipment and machinery, which points to falling investment spending and heightened risk aversion," he added.

A reading above 50 indicates expansion in the sector. Below 50 represents contraction.