Manufacturing softened slightly in July but still shows growth compared to June, according to the final results of Markit Economics survey where the data are slightly lower than last week's flash estimate. The manufacturing PMI for July is 51.4, down 4 tenths from the flash estimate and down 1.1 points from June. Growth in new orders is minimal at best, at 51.0 vs 51.9 for the July flash reading and 53.7 for June. This is one of the lowest new order rates of the recovery and points to thinning business in the pipeline. Exports orders contracted for a second month, at 48.6 reflecting weakness in both European and Asian demand. With orders thin, manufacturers continue to work down their backlogs which, at 48.7 and like new export orders, show a second straight month of contraction.
Relying on their backlogs, manufacturers continue to keep output up and they continue to add to their workforces, though both at marginal and slowing rates. Price pressures are mute, showing contraction for, once again, a second straight month. Inventories are stable while delivery times are shortening slightly in another indication of weakness.
This report, given last week's flash reading, isn't a surprise and isn't likely to have much impact on the markets especially given the pending release of the ISM survey later this morning at 10:00 a.m. ET. The ISM shocked the markets last month with a sub-50 headline reading that showed significant contraction in new orders.