3rd September, 2019
US Manufacturing sector reportedly crashed below expectation in August for the first time in three years as decreasing orders and production dropped to a minimum since January 2016. The downward slide has indicated the end of the expansion that spanned for 34 months.
The Institute for Supply Management, an association of purchasing managers, announced the index dropped from 51.2 in July to 49.1 in August. The decline is claimed to be as a result of the America-China trade war. ISM also noted: “Respondents expressed slightly more concern about U.S.-China trade turbulence, but trade remains the most significant issue, indicated by the strong contraction in new export orders. Respondents continued to note supply chain adjustments as a result of moving to manufacture from China. Overall, sentiment this month declined and reached its lowest level in 2019.”
The increasingly high-risk war between the U.S and China has worsened the push and pull of demand and supply. According to the analysis, orders dropped from 50.8 to 47.2. Production dropped from 50.8 to 49.5. Employment also dropped from 51.7 to 47.4.