Manufacturing remained on a steady course in August, the Institute for Supply Management said today.
The Tempe, Ariz.-based group’s manufacturing index, known as the PMI, registered at 52.8 percent last month, the same as July.
A PMI above 50 percent indicates an expanding manufacturing economy. Below that level indicates economic contraction.
The July and August PMI are the lowest index readings since June 2020, when the index was at 52.4 percent.
Regardless, ISM officials emphasized how manufacturing remains in an expansion mode. The PMI has been in positive territory for 27 straight months.
“We’re steady,” Timothy R. Fiore, chair of ISM’s Manufacturing Business Survey Committee, said on a conference call. The manufacturing economy continues moderate expansion, he said. “We’re definitely moving along.”
The index is based on a survey of executives in 18 industries. In August, 10 industries reported economic expansion, including petroleum & coal products, transportation equipment, primary metals, machinery, and miscellaneous manufacturing. Seven industries reported economic contraction.
The PMI has averaged 57 percent the past 12 months.
ISM’s New Orders Index improved to 51.3 percent in August from 48 percent the month before. Six industries reported a gain in new orders, with eight reporting a decline. New Orders are important because orders affect production in later months.
The group’s Production Index slipped to 50.4 percent from 53.5 percent in July. Six industries reported output gains, while nine reported declines in production.
ISM’s Employment Index rose to 54.2 percent in August, from 49.9 percent the month before. Nine industries reported job gains while six reported job losses.
The PMI is considered a leading economic indicator and a barometer of where the manufacturing economy is headed.
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