US Manufacturing Growth Eases Slightly in July

The S&P Global US Manufacturing PMI edged down to 53.8 in July 2026 from 53.9 in June, falling short of market expectations of 54.3, according to the preliminary estimate. Despite the slight decline, the index remained close to its highest levels in more than four years. The modest slowdown reflected a sharp easing in production growth, which weakened to its slowest pace since March, while new orders expanded at the weakest rate in four months. Slower inventory accumulation, following exceptionally strong stockbuilding in May and June, also weighed on the headline PMI. These headwinds were partly offset by a renewed increase in factory employment and longer supplier delivery times. Unlike the delays typically associated with strong demand, the latest deterioration in supplier performance was primarily linked to supply disruptions stemming from the Middle East.

The S&P Global US Manufacturing PMI was sharply revised down to 53.9 in June 2026, significantly below the preliminary estimate of 55.7 and May’s final reading of 55.1. Despite the drop, the latest figure marked the eleventh straight month of expansion, indicating a solid improvement in operating conditions, though the weakest in three months. Output and new orders continued to rise, albeit at slower yet historically strong rates, driven by new product launches and pre-orders to hedge against rising prices. Input costs increased sharply due to higher raw material prices, though the rise was softer than May’s peak. Selling price inflation also eased to a three-month low. However, job cuts accelerated to the fastest pace since May 2020, the quickest outside the pandemic since October 2009. Business optimism for the year ahead also declined for the second consecutive month, hitting its lowest level since October 2025.

The S&P Global US Manufacturing PMI increased to 55.7 in June 2026 from 55.1 in May, surpassing market forecasts of 54.8 and reaching its highest level since May 2022. This expansion signifies that factory business conditions have improved continuously since last August, with growth steadily accelerating from the recent low point in February. Driving this upward momentum, production growth accelerated at the fastest pace since July 2021, propelled by the largest surge in new orders since April 2022. Additionally, input inventories experienced their biggest increase since May 2025, marking the second steepest rise in the history of the survey. The PMI also benefited from the most significant lengthening of supplier delivery times recorded since August 2022. Conversely, the overall index gains were partially constrained by a substantial decline in employment, which represented the sharpest drop in manufacturing workforce levels since May 2020.