A new report released from the Institute for Supply Management says US Manufacturing dropped in the month of July amid smaller orders and increased inventory.
In the report, the institute for supply management said factory activity dropped to 52.8%, adding it was the lowest level since June 2020. In addition, the factory inventories index rose to 57.3%, suggesting manufacturers are having difficulty moving products to retailers.
ISM Chairman Timothy Fiore
The institute’s chair, Timothy Fiore, said factories in the United States are “expressing concern about a softening in the economy, as new order rates contracted for the second month amid developing anxiety about excess inventory in the supply chain.”
The institute also released joint comments from manufacturers in different industries. These comments shared insight on what they’re experiencing. Attached are the following:
Chemical Products Manufacturing:
“Inflation is slowing down business. Overstock of raw materials due to prior supply chain issues and slowing orders.”
“Chip shortages remain; however, the COVID-19 lockdowns in China are presenting even worse supply issues.”
Food & Beverages Manufacturing:
“Growing inflation is pushing a stronger narrative around pending recession concerns. Many customers appear to be pulling back on orders in an effort to reduce inventories.”
“New order entry has slowed down slightly; however, logistical issues have yet to improve. Long lead times for materials and labor shortages are still a major problem.”
Fabricated Metals Manufacturing:
“Our markets are still holding up; however, I believe a slowdown is coming. We are cautious about going out too far with orders. Also, I believe the general market is in the beginnings of a recession.”
Plastics & Rubber Manufacturing:
“Current order books are full, but there have been signs of a slowdown beginning in the fourth quarter.”