U.S. Midwest manufacturing in contraction amid trade tension
NEW YORK (Reuters) – Manufacturing industries in the U.S. Midwest tumbled into contraction territory in July as a deal on trade between China and the United States remained elusive, two private surveys showed on Wednesday.
The Chicago Purchasing Management Index, also known as the Chicago Business Barometer, fell to 44.4 this month from 49.7 in June. Analysts polled by Reuters had forecast a July reading of 50.6 for the index jointly developed by MNI Indicators and ISM-Chicago.
A reading below 50 means the Midwest factory sector is contracting.
“Sentiment faded further with firms facing weakness across the board,” Shaily Mittal, MNI senior economist said in a statement. “Global risks, trade tensions, slowdown in demand and somber growth expectations, all jeopardize business conditions.”
Four of the five components in the Chicago PMI index were in contraction mode in July.
The production measure hit a 10-year low, while the employment gauge slipped to its lowest level since October 2009.
Meanwhile, an index developed by Marquette University and published by the Institute for Supply Management-Milwaukee, which measure factory activities in parts of Wisconsin and the Illinois area, fell to 46.44 in July from 56.11 the month before.
A respondent for this month’s Milwaukee-ISM survey was cited saying: “Slowdowns in Chinese and European markets are impacting production in the United States.”
Another said, “Agricultural markets continue to slow.”
Reporting by Richard Leong; Editing by Andrea Ricci