Economic activity in the U.S. manufacturing sector contracted in August for the sixth consecutive month, following a two-month expansion preceded by 26 straight months of contraction, according say the nation's supply executives.
The latest ISM Manufacturing Purchase Managers Index (PMI) registered 48.7% in August, up 0.7 percentage points from July but still below 50%, which means an industry in contraction. The report was issued Sept. 2 by Susan Spence, MBA, chair of the Institute for Supply Management (ISM) Manufacturing Business Survey Committee.
While new orders are growing, production is slowing. New orders increased 4.3 percentage points to 51.4% on the index. However, production fell 3.6 percentage points to 47.8% in August, indicating contraction.
"In August, U.S. manufacturing activity contracted at a slightly slower rate, with new orders growth the biggest factor in the 0.7-percentage point gain of the Manufacturing PMI,” Spence said. “However, since production contracted at a rate nearly equal to the expansion in new orders, the Manufacturing PMI increase was nominal.”
The six industries reporting growth in production during the month of August were: Nonmetallic Mineral Products; Textile Mills; Electrical Equipment, Appliances & Components; Food, Beverage & Tobacco Products; Fabricated Metal Products; and Miscellaneous Manufacturing.
The six industries reporting a decrease in production in August, in order, were: Wood Products; Paper Products; Furniture & Related Products; Transportation Equipment; Plastics & Rubber Products; and Chemical Products. The six other industries indicated no change in production levels in August as compared to July.
Spence said inputs (defined as supplier deliveries, inventories, prices, and imports), on net, declined further into contraction territory. The Inventories Index (49.4%) improved slightly but is still in contraction territory, the Supplier Deliveries Index indicated slower deliveries, and prices continued to increase, but at a slower rate. The Imports Index moved further into contraction territory (46%).
The Employment Index (43.8%) increased slightly but remains in contraction territory.
