US factory activity slows

US manufacturing activity grew at a slower rate in June, survey data showed Wednesday, as businesses grappled with fallout from the Middle East war.

The Institute for Supply Management’s (ISM) manufacturing index came in at 53.3 percent in June, ticking down 0.7 percentage points from May.

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But the figure remains above the 50-percent mark separating growth from contraction.

“In June, 34 percent of the comments were positive and 66 percent negative,” said ISM survey chair Susan Spence in a statement.

“Among negative comments, the Iran war was mentioned in 31 percent and tariffs in 17 percent,” she added.

Many respondents also flagged price volatility as an issue for their companies.

US-Israeli strikes targeting Iran from late February had sparked Tehran’s retaliation in virtually blocking off access to the Strait of Hormuz. Oil prices surged, with added costs feeding through supply chains.

Energy costs have since eased amid a 60-day ceasefire as parties seek a final deal to end the conflict and reach agreement on Iran’s nuclear program.

In June, the ISM said new orders grew for a sixth straight month, while prices were still rising too -- although at a slower rate.

“The conflict in Iran has impacted pricing in every category of raw materials,” said a respondent in the chemical products sector.

“Especially, items that have a heavy concentration of oil in the components like our adhesives,” the respondent added.

Another survey respondent added that pressure from the Middle East conflict is triggering a “more conservative approach to capital expenditures.”