US ISM Manufacturing PMI Edges Higher

August PMI Inches Up, Reflecting Slower Contraction

The US Institute for Supply Management (ISM) has reported that the Manufacturing Purchasing Managers' Index (PMI) rose slightly from 47.5 in July to 47.7 in August, indicating a slower contraction in the manufacturing sector.

This is the lowest reading since May 2020, but it is higher than the consensus estimate of 47.4. The headline PMI has been below the 50 mark for the past five months, indicating contraction in the manufacturing sector.

Key Findings of the Report

• New orders decreased for the sixth consecutive month, with the index declining from 48.6 in July to 47.1 in August.
• Production fell for the second consecutive month, with the index dropping from 49.6 in July to 49.2 in August.
• Employment decreased for the fourth consecutive month, with the index falling from 49.9 in July to 45.3 in August, the lowest level since June 2020.
• Supplier deliveries slowed for the sixteenth consecutive month, with the index declining from 53.9 in July to 53.4 in August.
• Inventories increased for the sixteenth consecutive month, with the index rising from 53.6 in July to 54.5 in August.

Overall, the report suggests that the manufacturing sector is still contracting, but the pace of contraction is slowing. This could be a sign that the economy is bottoming out and that the manufacturing sector may start to recover in the coming months.