US Markit PMI manufacturing for the month of July
- The flash estimate for July was at 63.1
- Prior month (June) came in at 62.1
- July data signalled the most substantial improvement in operating conditions across the U.S. manufacturing sector on record.
- Supply delays and price pressures also hit new peaks
- output index for July comes in at 59.7. The highest reading since January. The flash trading was at 59.5 and June readings came in at 58.9
- input prices index it's a record at 86.7 versus flash reading of 86.4 and June reading of 82.8.
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IHS Markit said:
- Unprecedented supplier shortages and delays continued to exert upward pressure on input costs and stymie firms' ability to process incoming new work. As a result, cost burdens rose at a recordbreaking rate and the accumulation of backlogs accelerated.
- Contributing to the uptick in the headline figure was a sharper expansion in production at the start of the third quarter. The upturn was reportedly linked to stronger client demand and efforts to clear backlogs of work. The rate of growth was the steepest for six months and marked overall.
- July data signalled an unprecedented deterioration in vendor performance, as supplier delays were driven by transportation issues and severe raw material shortages.
A strong report.
Chris Williamson, the chief business economist at IHS Markit said:
July saw manufacturers and their suppliers once again struggle to meet booming demand, leading to a further record jump in both raw material and finished goods prices.
Despite reporting another surge in production, supported by rising payroll numbers, output continued to lag well behind order book growth to one of the greatest extents in the survey's 14-year history, leading to a near-record build-up of uncompleted orders.
Capacity is being constrained by yet another unprecedented lengthening of supply chains, with delivery delays reported far more widely in the past two months than at any time prior in the survey's history. Manufacturers and their customers are consequently striving to mainatain adequate inventory levels, often reporting the building of safety stocks where supply permits, to help keep production lines running and satisfy surging sales.
The result is perhaps the strongest sellers' market that we've seen since the survey began in 2007, with suppliers hiking prices for inputs into factories at the steepest rate yet recorded and manufacturers able to raise their selling prices to an unprecedented extent, as both suppliers and producers often encounter little price resistance from customers.
