The country’s manufacturing purchasing managers’ index (PMI) slipped into shrinking territory in July for the first time in more than two years.

The headline index, a key gauge of manufacturing activity, fell to 49.3 points from 50.7 in June, according to the PMI report published by S&P Global released on Thursday.

This marks the first contraction since August 2021, at the height of the covid-19 pandemic, and comes after 34 consecutive months of expansion.

A reading below 50 indicates a decline in activity while values ​​above that threshold indicate expansion.

“The market downturn led to a marginal decline in operating conditions in July, with new orders falling and output falling for the first time in two years,” Paul Smith, chief economist at S&P Global Market Intelligence, said in a press release published Thursday to accompany the latest survey results. .

Manufacturers had become more cautious, cutting purchasing and employment at the fastest pace since September 2021, Smith added, while supply constraints had exacerbated the situation with extended delivery times due to ongoing supply challenges.