U.S. Manufacturing Business Continues to Expand

Manufacturing expanded in August and the general U.S. economy grew for the 112th consecutive month, according to the nation’s supply executives in the latest Manufacturing ISM Report On Business. The August PMI registered at 58.1 percent, a 3.2  percent increase from the July reading of 57.3 percent.

The Report On Business measures its data using the Purchasing Manager’s Index (PMI), which is an indicator of economic health in the manufacturing sector. A reading above 50 percent indicates that the manufacturing economy is generally expanding, while below 50 percent indicates that it is generally contracting.

“Comments from the panel reflect continued expanding business strength. Demand remains strong, with the New Orders Index at 60 percent or above for the 16th straight month, and the Customers’ Inventories Index remaining low,” said Timothy R. Fiore, chair of the Institute for Supply Management (ISM) Manufacturing Business Survey Committee. “The Backlog of Orders Index continued to expand, at higher levels compared to the previous month. Consumption improved, with production and employment continuing to expand, at higher levels compared to July, despite shortages in labor and materials.

“Export orders expanded at stable levels. Prices pressure continues, but the index softened for the third straight month and remains above 70. Demand is still robust, but the nation’s employment resources and supply chains continue to struggle.

“Respondents are again overwhelmingly concerned about tariff-related activity, including how reciprocal tariffs will impact company revenue and current manufacturing locations. Panelists are actively evaluating how to respond to these business changes, given the uncertainty,” Fiore added.

Of the 18 manufacturing industries, 16 reported growth in August, in the following order: computer & electronic products; apparel, leather & allied products; textile mills; paper products; miscellaneous manufacturing; electrical equipment, appliances & components; furniture & related products; machinery; nonmetallic mineral products; transportation equipment; food, beverage & tobacco products; petroleum & coal products; plastics & rubber products; fabricated metal products; chemical products; and printing & related support activities.

The two industries reporting contraction in August were wood products, and primary metals.

Commodities Up in Price

Aluminum; aluminum based products; capacitors; caustic soda; corrugate; electrical components; electronic components; flour; freight; lumber; nylon; packaging materials; paper; phosphates; plastics; resistors; cold-rolled steel; hot rolled steel; stainless steel; steel-based products.

Commodities Down in Price

Aluminum; Copper; and Corn.

Commodities in Short Supply

Capacitors; Electrical Components; Electronic Components; Freight; Labor; and Resistors.

*Aluminum was reported as both up and down in price by ISM.

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