Manufacturing Output Growth Drops to Seven-Month Low

Source: Federal Reserve Bank Philadelphia

The expansion of the manufacturing output weakened to a seven-month low in July. The majority of the firms reporting either no change or decreases in their activity in the survey.

• The diffusion index fell to 21.9 in July, versus June’s 30.7 and July 2020’s 24.1. This is the lowest since December 2020’s 11.1%.
• Majority or 51% of the firms said there was no change in activity, 33% reported increases, and 11% reported decreases.
• The employment index fell to 29.2 from June’s 30.7 and July 2020’s 20.1, while the workweek index fell to 18.4.
• Firms continued to boost their workforce with over 38% saying they increased employment, and 9% recording declines.
• The majority or 72% of the firms reported higher input prices for the month, reporting overall increases in manufactured goods prices.
• The prices paid index fell to 69.7 from the 42-year high recorded the previous month.
• Optimism on future activity declined by 21 points to 48.6 from the near 30-year high in June.
• Some 59% of the firms expect increases in the next six months, while 10% predict declines.
• Future new orders and shipments also decreased, while future employment rose as the majority of the firms expect to boost their workforce in the next six months.