US manufacturing activity expands more than expected in June

ISTANBUL

The US manufacturing sector expanded more than market forecasts in June, according to data by S&P Global on Tuesday.

The S&P's Purchasing Managers' Index (PMI) rose to 52.9 points, up 0.9 points from May's 52. This was the highest reading since May 2022.

Markets expected the figure to stay at 52 points. A reading above 50 indicates growth, while below that figure signals contraction.

"Output increased for the first time since February, and to a solid degree, whilst new orders increased for a sixth successive month due to improved domestic and international demand," S&P Global said in a statement.

Nonetheless, tariffs continued to be a major topic in June, having a significant impact on pricing and purchasing decisions. The manufacturers increased their input purchasing activity to the highest level since April 2022, which occasionally reflected their attempts to increase stocks in light of the continued volatility of trade and prices.

"Nonetheless, input costs still rose sharply, with inflation hitting its highest level for nearly three years. A similar trend was seen for output charges, which rose to the greatest degree since September 2022," it noted.

Manufacturers recorded a first rise in production for four months. Growth was the second-steepest since March 2024, surpassed only by February’s near three-year record.

"Firms often linked the rise in production to higher volumes of new orders at their plants, which rose in June as they have done throughout the year to date," the statement said.

Both domestic and international demand increased in June due to positive marketing campaigns and new export orders.

"Tariffs also impacted purchasing and prices during June. Some manufacturers noted that tariff uncertainty had encouraged the building up of inventory and the purchasing of more inputs," it added.