The Institute for Supply Management's Purchasing Managers Index (PMI) grew to 59% in August, an increase of almost 2 percentage points over July. Any PMI number over 50% indicates a growing economy. According to the latest Manufacturing ISM Report on Business activity in the U. S. manufacturing sector expanded in August for the 15th consecutive month and the overall economy grew for the 63rd consecutive month.
"This month's PMI reflects the highest reading since March 2011 when the index registered 59.1%," said Bradley Holcomb, chairman of the ISM Institute for Supply Manufacturing Business Survey Committee. He added that the New Orders Index registered 66.7%, an increase of 3.3 percentage points over July, which indicates from the growth in new orders for the 15th consecutive month.
At the same time, the Production Index grew 3.3% to 64.5% over the July number. The Employment Index grew for the 14th consecutive month, registering 58.1%, a slight decrease of 0.1% from the July reading. Inventories of raw materials registered 52% up 3.5% from July, indicating growth in inventories following one month of contraction.
Manufacturing ISM Report On Business data is seasonally adjusted for new orders, production, employment and supplier deliveries indexes.
The August PMI is led by the highest recorded New Orders Index since April 2004, when it registered 67.1%.Of the 18 manufacturing industries covered in the report, 17 report growth in August in the following order: plastics and rubber products; furniture and related products; fabricated metal products; apparel, leather and allied products; wood products; printing and related support activities; miscellaneous manufacturing; paper products; petroleum and coal products; food, beverage and tobacco products; nonmetallic mineral products; chemical products; primary metals; transportation equipment; computer and electronic products; machinery; and electrical equipment, appliances components. The only industry reporting contraction in August is textile mills.Holcomb added one word of caution, saying that global geopolitical unrest that could dampen growth continues to be a source of concern among committee members.
