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U.S. manufacturing activity shows contraction in August

Xinhua, September 2, 2016 Adjust font size:

U.S. manufacturing activity contracted in August after expanding for five consecutive months, raising the risk that the country's economic growth in the third quarter might be weaker than expected.

The manufacturing index, also known as the purchasing managers index (PMI), registered 49.4, an decrease of 3.2 points from July's reading of 52.6, the Institute for Supply Management (ISM) said in a report on Thursday.

A reading above 50 indicates the sector is generally expanding, while a reading below that level indicates contraction.

The new orders index plunged by 7.8 points from the previous month to 49.1; production index dropped 5.8 points to 49.6; and employment index declined 1.1 points to 48.3.

Of the 18 manufacturing industries, only six were reporting growth in August. Analysts hold that U.S. manufacturing sector remained weak, as businesses remained cautious about investment and profits. Enditem