U.S. ISM Manufacturing PMI Improves Slightly in August; Prices Rise
by:Tom Moeller
|in:Economy in Brief
Summary
- Index moves up marginally from eight-month low but still indicates contraction.
- Employment & inventories lead August upturn while new orders & production weaken.
- Price index increases moderately.
The ISM Purchasing Managers Index of activity in the manufacturing sector rose to 47.2 during August after declining to 46.8 in July from 48.5 in June, according to the Institute for Supply Management. Remaining below 50 except for one month, the index has indicated contraction in U.S. manufacturing sector activity since November 2022. The index peaked at 64.0 in March 2021. A reading of 47.8 in August had been expected in the Action Economics Forecast Survey.
Movement amongst the index components was mixed last month. Leading the upturn, the employment series rose to 46.0 after plunging to 43.4 in July. The index remained below its high of 51.1 in May. Ten percent of respondents (NSA) reported higher employment while 19.1% reported it lower. The inventories index surged to a 19-month high of 50.3 from 44.5 in July. Each of the three other component series weakened. The new orders index fell to 44.6, a 15-month low, from 47.4. Seventeen percent of respondents reported high new orders while 26.2% reported them lower. The production series followed and declined to 44.8 last month from 45.9 in July. It has fallen from this year’s high of 54.6 in March. Thirteen percent of respondents reported higher production while 21.2% indicated declines. The supplier deliveries index fell to 50.5 in August from 52.6 as more respondents reported faster delivery speeds. Nine percent of respondents reported a quickening while 10.1% reported a slowdown.
The prices index, which is not part of the composite series, rose to 54.0 (NSA) last month from 52.9 in July. It remained beneath the April high of 60.9 but was well above the low of 39.4 in December 2022. The index peaked at 92.1 in June 2021 and averaged 46.6 last year. A lessened 21.4% of respondents reported higher prices last month while a fewer 13.4% reported price declines.
In other series, the export order index fell to 48.6, a seven-month low. Seven percent (NSA) of respondents reported higher exports while ten percent reported declines. The imports series rose to 49.6, but remains down from its high of 53.0 in March. The order backlog index rose to 43.6 (NSA) last month, its highest level in four months.
The ISM figures are based on responses from over 400 purchasing executives from 20 industries, which correspond to their contribution to GDP in 50 states. These data are diffusion indexes where a reading above 50 indicates expansion. The figures from the Institute for Supply Management can be found in Haver's USECON database; further detail is found in the SURVEYS database. The expectations number is available in Haver's AS1REPNA database.
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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