US ISM Manufacturing Index likely to slip in August – RBS

Sandeep Kanihama FXStreet Contributor

Research Team at RBS, notes that the US ISM manufacturing gauge dipped in July, but the drop was due to a decline in the supplier deliveries component.

Key Quotes

“The new orders measure was nearly unchanged (at a relatively high level) and the production component edged up, while the employment barometer slipped by only a point. Corroborating the strength in manufacturing activity, factory output in the Fed’s industrial production report increased 0.5% in July, with nonauto manufacturing production advancing by 0.4% (the strongest pace since November 2014).

In August, manufacturing sector indicators have been less upbeat, signalling some softening in factory activity in the month. On an ISMadjusted basis, the Philadelphia and Richmond Fed manufacturing indices fell in August versus July, and the New York and Kansas City Fed surveys were marginally softer as well.

Meanwhile, the flash reading of the Markit manufacturing PMI (a national measure, like the ISM) fell from 52.9 in July to 52.1 in August. Consequently, the ISM gauge may have slipped in August (we expect 51.7), suggesting a slight loss of momentum in the factory sector.”

Author

Sandeep Kanihama

FXStreet Contributor

Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.

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