What happened: July slowdown in core industrial output and manufacturing conditions
Reported growth in core industrial sectors (ICI) slowed to 5.4% in July from 6% in June. The Manufacturing Purchasing Managers’ Index (PMI) eased to its lowest level since August 2021, which is interpreted as reflecting weaker manufacturing demand conditions.
Background: year-on-year numbers can move due to statistical base effects
Year-on-year growth rates in ICI components can change because of statistical base effects (growth rates compare against a previous year’s same month). Examples reported for the ICI component movements include: Coal growth appearing stronger because the previous year’s comparison month had a contraction.Refinery products growth following a prior-year contraction.Iron ore growth remaining strong but being tempered by earlier-year comparisons.
What changed now: steel weakness and prolonged oil-and-gas contraction within ICI
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