“US manufacturers reported business conditions to have remained
the toughest for nearly a decade in June. The past two months have
seen the lowest readings since the height of the global financial
crisis in 2009.
“The survey provides accurate advance indicators of comparable
official data, and paints a worrying picture of marked declines
in both output and jobs. The June survey sub-index readings are
consistent with manufacturing output contracting at a quarterly
rate of 0.7% and factory payrolls falling by 18,000.
“A major development in recent months has been the deteriorating
performance of larger companies, where the last two months
have seen the lowest PMI readings for a decade. After inventories
rose sharply earlier in the year, large companies have moved to
destocking in May and June amid a sharp slowing in new order
“Although business optimism about the future lifted slightly higher,
it remained close to survey lows to indicate persistent low morale.
Worries centred on signs of slowing demand both at home and
internationally, weaker sales, and geopolitical uncertainty.
“Tariffs meanwhile continued to push up prices, but weak demand
often limited the ability of firms to pass higher prices onto
customers, suggesting overall inflationary pressures have weakened
compared to earlier in the year.”