Source: Sharecast
The Institute for Supply Management's Purchasing Managers' Index inched up from a reading of 48.5 for the month of May to 49.0 (Consensus: 48.8) in June.
The 50.0 point mark was the threshold separating between a contraction and an expansion in the sector.
Purchasing managers cited uncertainty around the outlook for tariffs as the main factor weighing on activity, save those in the Wood Products space who first referenced unrest in the Middle East.
One manager, from the Transportation Equipment sector told ISM: "the he word that best describes the current market outlook is ‘uncertainty.’ The erratic trade policy with on-again/off-again tariffs has led to price uncertainty for customers, who appear to be prepared to hold off large capital purchases until stability returns."
The key subindices linked to new orders and employment both fell, from 47.6 to 46.4 and from 46.8 to 45.0, respectively.
A gauge linked to the prices paid by firms meanwhile rose slightly, from 69.4 to 69.7.
The subindex for production on the other hand rose from 45.4 to 50.3.
"The modest rebound in the ISM headline index to 49.0 in June, from 48.5, should temper concerns of a factory sector collapse driven by tariffs and lingering trade uncertainty," Thomas Ryan, North America economist at Capital Economics said.
"While the hit to manufacturing activity from tariffs so far appears to have been limited, the further small rise in the prices paid index last month adds to evidence that firms are facing higher costs as a result."