Manufacturers in the United States experienced strong business growth in August. According to a new report by the Institute for Supply Management (ISM), the country’s manufacturing industry grew at its fastest rate in 14 years last month. After analyzing responses from its surveys, ISM researchers gave the American manufacturing industry a Purchasing Managers Index (PMI) of 61.3% — the highest PMI for the industry since 2004.
In July, the ISM gave the American manufacturing industry a PMI of 57.9%. That, of course, is still positive, as any index over 50 indicates growth, whereas indexes below 50 indicate shrinkage. However, the industry appears to have ballooned significantly faster than previous forecasts for the month of August, with the industry receiving an impressive 61.3% PMI during this period.
When speaking about the American manufacturing industry’s strong growth for the month of August, Timothy R. Fiore said it marks the 24th consecutive month in which the industry has expanded. “This indicates strong growth in manufacturing for the 24th consecutive month, led by continued expansion in all subindexes that make up the PMI. The PMI reached its highest level since May 2004, when it registered 61.4 percent,” said ISM executive Timothy R. Fiore.
Some areas of the American manufacturing industry are stronger than others, however. In its report, the ISM says that demand for made-in-America manufactured products remains strong. The ISM says that the industry’s New Orders Index has been 60% or higher for more than a dozen months. Furthermore, American manufacturing companies experienced higher employment and production numbers in August.
But not all manufacturing sectors experienced the same strong, positive growth in August. The report specifically covered 18 manufacturing industries. While most of these manufacturing industries did in fact grow during the month of August, two of them experienced contraction. So, which manufacturing industries fell short last month? The two mentioned in the ISM’s report include wood products and primary metals. The remaining 16 other manufacturing industries experienced growth and expansion.
Give the American manufacturing industry’s strong growth in recent months, many companies and analysts are skeptical of whether this trend will continue and for how long. However, all signs suggest that the industry will continue to grow. American manufacturing companies are experiencing strong demand, thereby allowing them to sell more products and grow their business. Granted, tariffs remain a concern among many manufacturers, but data suggests that it’s now slowing down manufacturers.
You can access the ISM’s Manufacturing report for the month of August by clicking here.