For the 15th consecutive month, the manufacturing sector showed expansion and the overall US economy grew for the 63rd consecutive month, providing further evidence that the country’s economic recovery is continuing, according to a report issued this month by Institute for Supply Management.
According to the ISM’s monthly “Report on Business”, the August PMI registered 59 percent, an increase of 1.9 percentage points from July’s reading of 57.1 percent, indicating continued expansion in manufacturing. The August PMI reflects the highest reading since March 2011 when the index registered 59.1 percent.
The report’s New Orders Index registered 66.7 percent, an increase of 3.3 percentage points from the 63.4 percent reading in July, indicating growth in new orders for the 15th consecutive month.
The Production Index registered 64.5 percent, 3.3 percentage points above the July reading of 61.2 percent.
And the Employment Index grew for the 14th consecutive month, registering 58.1 percent, a slight decrease of 0.1 percentage point below the July reading of 58.2 percent.
Inventories of raw materials registered 52 percent, an increase of 3.5 percentage points from the July reading of 48.5 percent, indicating growth in inventories following one month of contraction, according to Bradley J. Holcomb, chair of ISM’s Manufacturing Business Survey Committee.
“The August PMI is led by the highest recorded New Orders Index since April 2004 when it registered 67.1 percent,” Holcomb said in an ISM news release. “At the same time, comments from the panel reflect a positive outlook mixed with caution over global geopolitical unrest.”
Of the 18 manufacturing industries, 17 are reporting growth in August in the following order: Plastics & Rubber Products; Furniture & Related Products; Fabricated Metal Products; Apparel, Leather & Allied Products; Wood Products; Printing & Related Support Activities; Miscellaneous Manufacturing; Paper Products; Petroleum & Coal Products; Food, Beverage & Tobacco Products; Nonmetallic Mineral Products; Chemical Products; Primary Metals; Transportation Equipment; Computer & Electronic Products; Machinery; and Electrical Equipment, Appliances & Components.
The only industry reporting contraction in August is Textile Mills.