Growth in US manufacturing slides on financial market fears

The Institute of Supply Management (ISM) said that many factories in the US had scaled back production as anticipated demand for a wide range of consumer goods is expected to filter through in the next few months. Many retail spend figures for August will be announced during the latter course of this week, with many analysts believing that increased outgoings on mortgage payments due to successive rate rises together with pessimism over the economic outlook may combine to dampen consumer spend. Currently the International Council of Shopping Centers (ICSC) estimate that store sales have risen by an average of 2.5 per cent this year, down from a figure of 3.8 percent last year. Furthermore a recent poll by the ICSC suggested that only 46 percent of consumers said they would maintain their shopping patterns and remained positive about the outlook for the US economy. Likewise, the financial turmoil is already pointing to a credit crunch down, with US banks less willing to lend to potentially riskier consumers, again impacting spending power. The ICSC said that the manufacturing index fell to 52.9 in August, from 53.9 in July - a figure that was also slightly below market expectations. However, on the plus side, the figures did show that US manufacturing had continued to grow for the 70^th​ consecutive month and that overall growth within the sector remained strong. For the US personal care market the story has not been quite so rosy though, with the market continuing to be relatively stagnant as a whole, something that is underlined by the fact that the industry does not appear in the ICSC's list of top ten performing sectors. Industry observers believe that the slight downturn in manufacturing is likely to be further exacerbated by continued hikes in the cost of raw materials for the personal care segment, ultimately putting added pressure on margins in an already embattled market.