The Institute for Supply Management’s Manufacturing Purchasing Managers’ Index showed its slowest growth rate in two years, down to 51.1 in August from 52.7 in July.
This was the lowest level since May 2013, illustrating the struggles manufacturers continue to face in light of economic headwinds from a stronger dollar and sluggishness abroad, according to Chad Moutray, chief economist with the National Association of Manufacturers.
“To illustrate these challenges, exports have contracted in six of the past eight months, with the latest figure representing the quickest rate of decline since July 2012,” Moutray wrote in his weekly analysis of U.S. manufacturing. “Indeed, exports of manufactured goods have declined 4.9 percent year to date through July using non-seasonally adjusted data, relative to the same point last year, according to the latest trade data.”
These year-to-date export declines extended to our top four trading markets: Canada, Mexico, China and Japan. On the positive side, the U.S. trade deficit narrowed in July after climbing in June.
Boatbuilders such as Brunswick Corp. have cited sluggish international sales, particularly pointing to Canada during quarterly earnings calls with investors and analysts.
In August, manufacturing employment declined by 17,000, the first monthly decrease in hiring in just more than two years, Moutray wrote. Through the first eight months of this year, hiring has averaged 3,500 a month for manufacturers — well below the more robust average of 20,667 a month during the second half of 2014.
Financial concerns in the global equity markets, driven in particular by worries about growth in China, probably have not helped matters recently and could partly explain the lower manufacturing hiring rates for August.