Canned fish factory. Food industry. Sardines in red tomato sauce in tinned cans at food factory. Food processing production line. Food manufacturing industry. Many can of sardines on a conveyor belt.

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.

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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.”

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