While the American manufacturing industry has experienced its fair share of ups and downs in recent months, August was reported as one of the strongest months for the industry.
According to the Institute of Supply Management (ISM), the American manufacturing industry reached a six-year high in the month of August, signaling a positive trend for both the industry as well as the U.S. economy. After conducting its survey, the ISM found that all six of the country’s top manufacturing sectors increased their activity last month. More specifically, the manufacturing industry’s purchasing managers index increased by 2.5 points to 58.8 points, which was the highest level it had experienced since 2011. Analysts attribute this trend to increased production and expanding inventories. To put that number into perspective, analysts had predicted a purchasing managers index of just 56.6 points.
Of course, any rating over 50 signals positive growth — and that’s exactly what you want to see when looking at the ISM index. It wasn’t just the purchasing managers index that saw gains in August, however. Additionally, manufacturing exports and new orders climbed, though to a lesser degree than in the months prior.
So, what does all of this mean for the average American worker? For starters, it means more jobs are being created in the American manufacturing industry. In fact, the Bureau of Labor Statistics (BLS) said earlier last week that employment in the manufacturing industry had reached its highest point in nearly five years.
When speaking about the report, Ian Shepherdson of Pantheon Macroeconomic explained that the manufacturing industry was in a “robust recovery” shortly before Hurricane Harvey hit. Of course, we won’t know the full effects of Harvey until the ISM releases its next report later this month. Nonetheless, it’s safe to assume the hurricane had at least some negative impact on the American manufacturing industry.
“The report paints a picture of a robust recovery in the industrial sector immediately before Hurricane Harvey,” said Ian Shepherdson of Pantheon Macroeconomics.
Analysts have also said that the gains experienced in the American manufacturing industry could be attributed — at least to some degree — to increased consumer spending as well as growing business investments.
The bottom line is that the American manufacturing industry is growing at a strong and healthy pace. August marked a six-year high for the industry, and there’s no signs of it slowing any time soon.