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American manufacturing drives into higher gear

By Religare
|

Rebounding from June's 20-month low, American manufacturing activity regained steam in the month of July 2015 as firms boosted production at swifter rates amidst a pickup in new business volumes, a sign that the sector that makes up about 12 per cent of the world's biggest economy, is on the road to recovery following a sluggish start earlier this year when supply chain disruptions and harsh winter weather wreaked havoc.

 

The gauge measuring US manufacturing climbed to 53.8 in July from 53.6 in June, with a reading above 50 signaling expansion, Markit Economics reported on Friday.

A rebound in overall growth momentum largely reflected stronger rises in output and new business levels in July, the survey noted.

New business received by the US manufacturing sector was the strongest in three months in July, led by strong sales from domestic markets, and an upturn in work from export markets, prompting manufacturing companies to boost production at accelerated rates.

Nonetheless, a stronger dollar which has tarnished the competitiveness of American goods abroad continues to restrict overseas sales while headwinds in Europe and China have also cast a shadow over US exports, forcing US companies to increase focus on domestic markets, even as an oil price rout curbs spending from energy firms.

"A modest upturn in the headline manufacturing PMI belies some more worrying undercurrents which point to potential weakness in coming months", the report said.

Story first published: Monday, July 27, 2015, 12:40 [IST]
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