- Prior was 54.0
- Prices paid 70.3 vs 67.7 prior
- New orders 57.2 vs 55.1 prior
- Employment 47.4 vs 51.2 prior
- Business activity 59.1 vs 55.4 prior
The S&P Global final PMI for July was released shortly before this report and was at 54.6 vs 53.6 previously, that was an 8-month high. This report missed but there were some positive signs in business activity and new orders. The big drag is employment, which fell back below 50, and in a big way. That might reflect temporary jobs in the World Cup and USA 250 celebrations but it’s somewhat worrisome to have weakening employment at the same time as rising inflation. This raises the stakes somewhat for Friday’s non-farm payrolls report and adds downside risks. Today’s ADP employment number was also soft.
Comments in the report:
- “Overall volume of business is slightly down for the year.” [Agriculture, Forestry, Fishing & Hunting]
- “Sales continue to slide despite increased discounts. Mounting cost pressures from all fronts.” [Construction]
- “Economic conditions remain stable. Banking activity continues to be
supported by healthy commercial client demand, though businesses remain
cautious amid interest rate and inflation uncertainty. Overall outlook
remains positive for both the banking industry and my company.” [Finance
& Insurance] - “In the tertiary care segment of hospital operations, patient
volumes, revenue and activity across the board are up, and given the
economic climate, this was an unexpected result. Supply chains are
operating as expected: There are few, if any, impactful back orders,
deliveries are consistent and fill rates are up. Employment is still in
high demand, yet our institution appears to be faring well as full-time
employee positions are filling without excessive recruitment. Forecast
remains above average.” [Health Care & Social Assistance] - “Business is starting to pick up especially with smaller firms. Just
hope it keeps improving.” [Management of Companies & Support
Services] - “Uncertainty on how the Iran conflict will impact the price of oil,
as well as the knock-on effect to construction and other materials. The
city has several capital projects pending and ongoing, which will be
impacted.” [Public Administration] - “Network gear supply (internet access points and switches) for store
equipment set up on four- to six-month lead times; needing to place
large order in anticipation of new store openings in order to have
sufficient network gear to run the store.” [Retail Trade] - “Conditions are largely unchanged from last month. The exception is
pricing, which continues to rise, driven mainly by fuel and labor costs.
Demand remains stable.” [Transportation & Warehousing] - “Electric utility materials continue to be in high demand, causing
competition among utilities for production slots. Furthermore, more
suppliers are requiring progress payments or a down payment on goods as
part of PO agreements.” [Utilities] - “Business is more robust than expected, considering some of the
economic headwinds still plaguing the industry. Lumber supply is
tighter, and freight rates and availability are challenges. Many of our
builders are pushing back hard on price increases. However, the outlook
is favorable for the remainder of 2026.” [Wholesale Trade]
