Contention 1 is Construction collapse Construction industry faces challenges despite infra bill Gregory, Senior vp – Wells Fargo, 2022. [
Manufacturing is facing a massive decline. Smith 22
Download 38.76 Kb.
|
- Navigate this page:
- US manufacturing
- Shrinking orders come as consumer spending slows under the weight of inflation
| Manufacturing is facing a massive decline. Smith 22
Molly Smith (), Bloomberg, 7-1-2022 ["US Manufacturing Growth Weakens to Two-Year Low as Orders Slump", https://www.bloomberg.com/news/articles/2022-07-01/us-manufacturing-growth-weakens-to-two-year-low-as-orders-slump, accessed 7-20-2022] A&M ML A measure ofUS manufacturing activityweakened in June to a two-year low as new orders contracted, restrained by lingering supply constraints and some softening in demand. The Institute for Supply Management’s gauge decreased to 53 last month from 56.1 in May, according to data released Friday. Readings above 50 indicate expansion. The figure was weaker than most economists’ estimates in a Bloomberg survey, which had a median projection of 54.5. The group’s index of new orders dropped nearly 6 points to 49.2, the poorest result since May 2020, when the economy was digging its way out of the pandemic-induced recession. Shrinking orders come as consumer spending slows under the weight of inflation and inventories pile up. US manufacturing survey weakens as orders gauge shrinks The ISM gauge of manufacturer inventories ticked up to 56, near the highest reading since 2010. Timothy Fiore, chair of ISM’s Manufacturing Business Survey Committee, said that manufacturing growth was “held back by supply chain constraints,” with respondents noting that and pricing were their biggest concerns. Fifteen manufacturing industries reported growth in June, led by apparel, textiles, printing and computer and electronic products. Stocks erased gains after the release, while Treasuries extended their advance and the dollar strengthened. The results are consistent with several regional Federal Reserve bank surveys that show a clear pullback in June factory activity. Gauges of manufacturing in Texas and in the Fed districts of Philadelphia and Richmond dropped to the lowest levels since May 2020. Select ISM Industry Comments “Backlog is high, but incoming orders slowing this month.” - Computer & Electronic Products “New orders have stabilized and not increased.” - Chemical Products “Our suppliers are experiencing a softening of orders. We are still running at the same high level we did throughout 2021 and in early 2022.” - Machinery “Business is still steady. Some customers are pushing orders out because they have too much inventory.” - Fabricated Metals “We are hearing from customers that their inventories are high, and sales are coming down. We expect orders to decline on the coming months until inventories are leveled properly against demand.” - Apparel “Orders and production continue to be strong, but material availability is holding us back[ml9] . Cannot run enough hours to eat into the backlog.” - Electrical Equipment & Appliances “Supply seems to be settling to some degree, but what it is settling into remains in question.” - Primary Metals Data on Thursday showed US inflation-adjusted consumer spending fell in May for the first time this year, reflecting a drop in outlays for goods. In a sign that supply chains and capacity constraints appear to be easing, ISM’s measures of delivery times and backlogs both declined in June to the lowest levels since 2020. Meanwhile, the purchasing managers group’s production index climbed to a four-month high. And for a third straight month, a gauge of price paid by producers declined, suggesting costs of raw materials are starting to ease. However, the index remains elevated and concerns about high petroleum prices linger. The ISM’s employment index fell to the lowest since August 2020, suggesting firms are struggling to find workers. Download 38.76 Kb. Share with your friends:
|