S&P market intelligence economist Usamah Bhatti noted that the manufacturing firms remained unsure regarding the speed of the recovery, with downside risks centred around a muted global economy.

He said that the latest manufacturing PMI data suggested that demand conditions in the manufacturing sector remain subdued midway through the third quarter of 2024 (Q3 2024), as production and new order inflows moderated at a marginal rate.

“That said, the data remain consistent with the gross domestic product growth seen in the second quarter of the year continuing,” he said in a statement.

However, he said further evidence suggests that conditions will likely remain subdued in the short-term.

“Firms are opting to work through existing orders, in the absence of new order growth, while also scaling back purchases, employment and stock holdings,” he added.

S&P said demand remained generally subdued in August, with firms scaling back production at a modest rate, nonetheless, it was the steepest reduction for four months.

It said that data from the survey also suggests that the coming months are likely to remain muted, as manufacturers further scale back purchasing activity, and wind down stocks of purchases and finished items amid a lack of new orders.

It added that total new business moderated slightly for the second month running, while at the same time, demand conditions in international markets improved for the fifth consecutive month, albeit at the softest rate in the current sequence.