In the United States, the rapid growth in the service industry has offset the contraction in the manufacturing sector, leading to the fastest increase in commercial activities in July this year. Data released by S&P Global on Thursday, July 24th, showed that the composite output index for July rose from 52.9 to 54.6 compared to the previous month. An index above 50 indicates economic expansion.
The S&P Global index measuring service industry activities also reached its highest level for this year. In contrast, the manufacturing Purchasing Managers’ Index (PMI) dropped by 3.4 points to 49.5, marking the largest decline in three years and the first contraction since December.
Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, expressed concerns in a statement, noting that “manufacturing conditions deteriorated for the first time this year, with uneven growth and excessive reliance on the service industry, raising worries, while the boost from services and tariff front-loading appears to be waning.”
Despite the overall increase in the composite index, the survey revealed that concerns over government trade policies and their impact on costs still linger among businesses.
The composite index for input prices rose this month. Additionally, the prices of goods received also increased, indicating that businesses have successfully passed on the higher material costs.
The survey was conducted from July 10th to 23rd, primarily before the Trump administration announced trade agreements with Japan and Indonesia.
The above information was referenced from reports by Bloomberg.
It is noteworthy that as the service industry continues to flourish and offset the decline in manufacturing, the overall economic outlook remains relatively positive. However, the concerns expressed by businesses regarding government trade policies and their implications on costs suggest that challenges and uncertainties still exist in the current economic landscape.