MW: U.S. manufacturing growth 2nd-worst post recession
By Steve Goldstein, MarketWatch
WASHINGTON (MarketWatch) — Growth in the U.S. manufacturing sector slowed in July to the second-weakest level since the country emerged from recession, according to a survey released Tuesday.
The Markit flash U.S. manufacturing purchasing managers index dropped to 51.8 from 52.5 in June, which is the worst level since December 2010 and second-worst since late 2009. Any readings above 50 indicate an improvement from the prior month.
The flash index is based on 85% to 90% of typical monthly responses and released about a week ahead of the final data.
Though the index isn’t as widely followed as the similarly constructed Institute for Supply Management’s manufacturing gauge, the data nonetheless help confirm the slowdown which the ISM results have been showing.
The output index dropped to 52.2 from 53.4 in June, and the new-orders index fell to 51.9 from 53.7, with the new-export orders staying in contraction territory at 48.2 from 48.3.
One small bit of good news came from employment, which edged up to a 52.9 from a 52.8 reading.
“The U.S. manufacturing sector is clearly struggling under the pressure from falling exports, which showed the first back-to-back monthly decline for almost three years in July,” said Chris Williamson, chief economist at Markit, in a statement.
Much of the export weakness stems from the euro-zone debt crisis and slowing activity in China.
Earlier, Markit reported that euro-zone manufacturing PMI dropped to 44.1 in July from 45.1 in June, which marks the worst level in more than three years, and that the HSBC Chinese manufacturing PMI edged up to 49.5 from 48.2 in June.
Paul Dales, senior U.S. economist at Capital Economics, suggests the U.S. data is consistent with the economy growing at a 1.5% clip. But he said it was encouraging that the Markit data didn’t turn to outright contraction like the ISM figures did in June.
Steve Goldstein is MarketWatch's Washington bureau chief.
