The manufacturing sector is facing significant headwinds, according to the latest ISM Manufacturing Index.
The index fell to 48 in July, marking the fastest contraction in nine months and the fifth consecutive month below the key 50-point threshold. This signals a deepening downturn in the sector.
A particularly concerning detail is the Employment Index, which hit its lowest level in over five years, reflecting three straight months of factory job losses. This aligns with broader labor market softness, as recent payroll growth has been the weakest since the pandemic.
New orders contracted for the sixth straight month, while improved supplier delivery times point to weaker demand. Tariff uncertainty is a major factor, with recent announcements maintaining 10% baseline rates impacting planning, sourcing, and pricing.
Manufacturers are reporting strained sourcing strategies, forecasting difficulties, and margin pressures, all exacerbated by tariffs and rising input costs.
#EyeOnVolatility
