By Michael Tobin
A reading of manufacturing activity in the U.S. dropped in July to the lowest level since September 2009, according to a report released Thursday.
The IHS Markit U.S. Manufacturing Purchasing Managers' Index fell to 50.4, down from 50.6 in June, indicating "the slowest overall expansion since the height of the financial crisis in September 2009," IHS Markit said.
Readings above 50 signify economic expansion while those below 50 indicate economic contraction. The report said that manufacturers reported "only a marginal rise in production" last month and the growth rate is at the slowest level since June 2016.
"U.S. manufacturing has entered into its sharpest downturn since 2009, suggesting the goods-producing sector is on course to act as a significant drag on the economy in the third quarter," IHS Markit Chief Business Economist Chris Williamson said in a press release.
Mr. Williamson added that a decrease in U.S. business spending and lower levels of exports are driving the downturn and that the potential effects of trade wars are worrying manufacturers. Exports orders contracted for the second time in three months and purchasing activity fell for the first time since April 2016, the report said.
Employment also fell for the first time since June 2013 with the report saying that manufacturers are more cautious about hiring new employees.
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(END) Dow Jones Newswires
August 01, 2019 10:51 ET (14:51 GMT)Copyright (c) 2019 Dow Jones & Company, Inc.