GPI Slows in July

Following a rebound in June, the Global Purchasing Index takes a 1.6% drop in July but remains in positive territory as purchasing managers cite spotty business conditions.

After reaching a six-month high in June, the Global Purchasing Index slipped in July as purchasing managers reported a drop in purchasing activity and increasing prices during the month. Launched this past January, the GPI measures purchasing managers’ business confidence monthly.

115.6, it remained above May’s all-time low of 111.9 and continues its upward climb out of the springtime slump. GPI panel members characterize the business climate as “very sporadic” and “challenging.” “The challenging market environment has compelled us to adapt by implementing new marketing strategies,” one panel member said. “[Business is] very sporadic,” another panel member noted. “[But we are] seeing more engineering inquiries.” Overall, GPI panel members reported an increase in new orders, inventories and pricing in July along with a drop in purchasing activity and slightly shrinking lead times.

New Orders Continue to Climb, Inventories Grow

Despite the overall dip in the GPI, purchasing managers say new orders from customers remain on the rise, increasing 9% over June to a record level of 2.28 (on a scale of 1 to 3) for the month. This represents the first time the new orders index has exceeded its January level of 2.22.

Panel members reported that inventory levels remained high, though, with the inventories index reaching an all-time high of 2.19, a 2% increase over June.