Analysts at Nomura suggest that US manufacturer sentiment in July likely remained elevated, but they forecast that trade concerns and some capacity constraints may have resulted in the ISM manufacturing index retreating 0.8pp to 59.4 from 60.2.
Key Quotes
“Incoming data on regional manufacturing surveys have been mixed. In addition, part of the increase in the June ISM manufacturing index was related to a sharp gain in the supplier deliveries index.”
“Increases in this index are typically related to higher demand but, based on anecdotal evidence from business surveys, we think the increase in June likely reflects increased trade-related disruptions to supply chains.”
“We expect this index to remain elevated as trade-related disruptions and supply constraints persist, but we believe that the current level of 68.2 is likely unsustainable.”
“Overall, we believe the ISM manufacturing index will remain in healthy territory over the near term as the US growth outlook remains on firm footing.”
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