Factory order growth in US slows down
Manufacturing in EU-17 shrinks
New orders for US factory goods rose more than anticipated in July as demand for transport equipment surged, providing some optimism regarding the health of American manufacturing at the start of the third quarter.
Statistics from the Commerce Department indicated that factory orders rose 2.4% for the month after a revised 0.4% fall in June, as orders for transport equipment rose 14.8%, the biggest increase since January. Market participants had expected a 2% rise in orders.
Despite July’s gain in factory orders the growth rate in the US manufacturing sector in August slowed to the lowest level in two years. The Institute for Supply Management’s index for the manufacturing sector slowed to 50.6 from 50.9 in July. Analysts had predicted the level to fall to 48.5, which would have represented the first contraction since 2009.
Despite beating expectations, the index remains at its lowest level since July 2009. A reading above 50 indicates expansion in the sector while a reading below 50 represents a contraction.
Manufacturing in the eurozone shrank for the first time in almost two years in August due to a marked fall in output and new orders.
The Markit eurozone manufacturing Purchasing Managers Index fell to 49 in August from 50.4 in July.
This was the first fall below 50 since September 2009, and was revised down from a preliminary reading of 49.7.
Eurozone inflation was unchanged in August while the number of unemployed rose, data showed on Wednesday.
Inflation in the 17-nation region stood at an annual 2.5 per cent in August, the same as July, as economists expected.
UK manufacturing contracted the most in over two years in August as demand from domestic and overseas customers weakened. The PMI index for the sector fell to 49 from 49.4 in July, matching economists’ forecasts.
This article was compiled by Bank of Valletta plc for general information purposes only.