The food, beverage, and tobacco industry was one of seven that contracted in July, while manufacturing as a whole continued to grow but at a slower rate, according to the most recent Manufacturing ISM® Report on Business®. The July manufacturing PMI was 52.8%, down 0.2 percentage points from June.
Overall, the biggest change was in the prices index, which declined 18.5 percentage points to 60%. This means that prices are still increasing, but at a slower rate. Meanwhile, new orders and employment are both contracting.
The food, beverage, and tobacco industry reported a decrease in production, a decrease in employment, and contracting inventories. On a positive note, the industry reported growth in new export orders.
According to one industry respondent, “Growing inflation is pushing a stronger narrative around pending recession concerns. Many customers appear to be pulling back on orders in an effort to reduce inventories.”
