S&P Global Manufacturing PMI Holds Steady at 53.9 for July

The final reading of the S&P Global Manufacturing PMI for July was unchanged at 53.9, slightly above the preliminary estimate of 53.8 and the previous month's figure of 53.9. This steady reading reflects continued expansion in the manufacturing sector, albeit at a decelerating pace.

Key highlights from the report include:

• Output Growth: The rate of output growth has slowed to its weakest level since March, indicating a potential cooling in manufacturing activity.
• New Orders: New orders have softened for the third consecutive month, reflecting a decline in demand.
• Export Demand: Weak export demand has been attributed to tariffs and subdued global economic conditions.
• Supply Chain Issues: Supply chain disruptions have intensified, with vendor delays reaching their highest levels in four years, exacerbated by geopolitical tensions in the Middle East.
• Inflation Pressures: While inflation pressures eased slightly, input costs and selling prices continued to rise, driven by high energy prices and tariffs.
• Hiring Trends: Employment growth remains subdued, with backlogs increasing due to material shortages.
• Business Confidence: Confidence among manufacturers has decreased to its lowest level since October 2025, as concerns over inflation and supply constraints mount.

Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, noted, "Although the headline PMI held steady in July, beneath the survey we see some warning signs about the future growth trajectory. Production rose at a markedly slower rate, linked to a third month of weakened growth of new business, reflecting reduced inventory building after the strong stock accumulation reported in the second quarter."

Despite these concerns, U.S. equity markets reacted positively, with the Nasdaq up approximately 1%, the S&P 500 rising 0.82%, and the Dow Jones increasing by 1.22%. Key contributors to this market performance included significant gains from major companies such as Microsoft (+5.40%), Amazon (+5.29%), and Salesforce (+4.90%).