The U.S. manufacturing sector has expanded for the sixth consecutive month with a noticeable slowdown in the increase of raw material prices.

Manufacturing activity in the United States expanded for the sixth consecutive month in June, with the increase in input costs due to the war easing slightly. Data released by the Institute for Supply Management on Wednesday showed that the manufacturing index for June dropped 0.7 points to 53.3, still close to a four-year high, indicating that the manufacturing expansion period is the longest since 2022. At the same time, the rate of increase in raw material prices in June slowed significantly. The price index dropped by a significant 9.1 points to 73, the largest monthly decline since July 2022, as international oil prices fell sharply after the temporary agreement between the United States and Iran. The pace of new orders slowed slightly but remained robust, with the ISM production index falling to a six-month low. In recent months, strong capital expenditure and defense spending have continued to support the manufacturing sector. The war has also prompted some companies to stockpile products early, further supporting short-term demand. However, the expansion of manufacturing has not yet translated into the job market. The ISM employment index rose to 49.7 in June, the highest level since January 2025, but below 50, indicating that manufacturing employment continues to decline. The US government will release its monthly non-farm payroll report on Thursday. The backlog of orders decreased to its lowest level this year, while the supplier delivery index continued to show extended delivery times. Supply chain disruptions and concerns about further price increases in the future may cause some factories to increase their raw material inventories. The ISM inventory index rose to its highest level in more than a year.