U.S. manufacturing growth plunges to slowest pace in almost 3 yrs amid tariff concern

Source: Xinhua| 2019-07-01 23:37:10|Editor: yan
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WASHINGTON, July 1 (Xinhua) -- The expansion of U.S. manufacturing activities continued to decelerate in June amid concern over the administration's tariff measures, registering the slowest pace since October 2016, data released Monday by the Institute for Supply Management (ISM) showed.

According to the latest Manufacturing ISM Report on Business, the June purchasing managers' index (PMI), which gauges the performance of the manufacturing sector, registered 51.7 percent, a decrease of 0.4 percentage point from the May reading of 52.1 percent.

For the past 12 months, the PMI figure averaged at 56.0 percent, the ISM report showed.

The expansion in the manufacturing sector, which is often signaled by a PMI reading above 50 percent, "indicates growth in manufacturing for the 34th consecutive month," said Timothy Fiore, chair of the ISM's Manufacturing Business Survey Committee.

"Softening this month was primarily due to demand and inputs -- new orders, supplier deliveries and inventories," he added.

"Prices contracted in June for the first time since February," Fiore said, adding that shortages and price increases remained in electronic components and food ingredients, and were offset by copper, steel, energy and aluminum price declines.

The tariffs the U.S. administration imposed or threatened to impose on trading partners were cited by survey respondents as the main concern, according to the report.

"Tariffs are causing an increase in cost of goods, meaning U.S. consumers are paying more for products," one respondent from the chemical product industry was cited as saying.

"A late planting season has caused a slowdown in our agricultural business," said another respondent representing the machinery industry. The respondent added that the business is "seeing higher prices due to tariffs and tariff-related supply chain issues."

Among all the eleven indicators tracked by the ISM, six illustrated a decrease in growth rates month-on-month, with the sharpest decline occurring in the prices index, which had decreased 5.3 percentage points to 47.9 percent.

Furthermore, the new orders index was down 2.7 percentage points to 50.0 percent, the inventories index dropped 1.8 percentage points to 49.1 percent, and the supplier deliveries index dipped 1.3 percentage points to 50.7 percent, according to the report.

The biggest increase occurred in the production index, rising 2.8 percentage points to 54.1 percent and trailed by the new consumers' inventories index, which was up 0.9 percentage point to 44.6 percent, the data showed.

The June PMI figure corresponded to a 2.6 percent increase in real gross domestic product on an annualized basis, the report added.

The U.S.-based ISM is a non-profit supply management association providing information and training for professionals and organizations.