American industry faces continuing struggles as cost pressures rise
The latest business indicators suggest a worsening downturn in the American industrial sector. According to the Institute for Supply Management, "the ISM manufacturing index increased to 47.2 points in August from 46.8 points in July, but it remains below the 50-point threshold, signalling a contraction in activity in this sector."
PKO BP published a report on this. Analysts highlight that "companies have curtailed production due to weak inflows of new orders and decreasing levels of backlogged orders." Additionally, "businesses continued to reduce employment through layoffs and hiring freezes."
The S&P Global PMI index reflects an even worse sentiment. According to the institution's report, "the PMI for the US industry fell to 47.9 points in August from 49.6 points in July, indicating that the condition of the industrial sector worsened for the second month in a row."
Worse data from the USA
A worrying signal is the increasing cost pressure in the American industry. According to the ISM report, "prices have risen for the sixth month in a row." Meanwhile, according to S&P Global, "production cost inflation reached its highest level in 16 months, which, combined with demand problems, intensifies concerns about the future condition of the sector."
Experts emphasise that "the manufacturing sector is facing challenges such as low demand amid still significant cost pressures, for example, in terms of raw material prices." This situation "may signal an economic cooling in the face of the still restrictive Fed policy."
Analysts expect that the Fed's policy "should soon be eased, which could support the sector." However, for now, business sentiment remains pessimistic - according to ISM, "they are at the lowest level since the pandemic."
