U.S. Manufacturing Expanded in August: ISM® Manufacturing PMI® at 54.6%

Summary

U.S. manufacturing expanded in August 2026 for the eighth consecutive month, with the ISM® Manufacturing PMI® registering 54.6%, down slightly from July’s 55.6%. New orders, production, employment, supplier deliveries, inventories, prices, imports, and exports all remained in expansion territory, signaling continued strength across the sector.

Manufacturing Activity Remains Strong Despite Slight Cooling

The August PMI® reading of 54.6% indicates continued expansion in U.S. manufacturing, though at a slightly slower pace than July. According to ISM®, the overall economy has now expanded for 22 straight months.

Key highlights from the August report:

• New Orders Index: 53.7% (down from 56.7%)
• Production Index: 58.3% (slightly below July’s 58.5%)
• Employment Index: 51.2% (down from 52.8%)
• Supplier Deliveries: 59.3% (slower deliveries = expansion)
• Inventories: 50.6%
• Customers’ Inventories: 42.8% (still too low)
• Prices Index: 71.1% (unchanged from July)
• Imports: 52.5%
• Exports: 53.2%

All five core subindexes remained in expansion territory, though several slowed compared to July.

What’s Driving August’s Manufacturing Performance

1. New Orders Still Growing But Cooling
   New orders expanded for the eighth straight month, though at a slower pace. This signals continued demand but hints at moderating momentum.

2. Production Remains Strong
   Production stayed robust at 58.3%, supported by steady order flow and improved supply‑chain conditions.

3. Employment Softens Slightly
   Hiring slowed but remained in expansion territory, reflecting cautious but ongoing workforce growth.

4. Supplier Deliveries Slowing for the Ninth Month
   Slower deliveries (59.3%) indicate rising demand and continued supply‑chain normalization.

5. Prices Still Elevated
   The Prices Index held at 71.1%, showing persistent cost pressures across raw materials.

How August Compares to Other Manufacturing Indicators

S&P Global’s August PMI® also showed expansion, registering 53.9%, though with slower output and order growth due to supply issues and higher prices.

Trading Economics reported a flash estimate of 53.2%, reflecting moderation tied to fuel costs, inventory adjustments, and raw‑material shortages.

Together, these datasets confirm a manufacturing sector that is expanding but facing cost pressures and supply‑chain friction.

What August’s PMI® Means for U.S. Manufacturers

1. Continued Expansion Through Q3
   Manufacturing remains on a growth trajectory, supported by strong production and stable demand.

2. Cost Pressures Persist
   Prices remain high, especially for energy and raw materials.

3. Supply Chains Improving Slowly
   Supplier deliveries are still slow but trending toward normalization.

4. Hiring Remains Positive
   Employment continues to expand, though at a moderated pace.

5. Inventory Strategies Are Shifting
   Customers’ inventories remain too low, signaling potential future order strength.

Key Takeaways

• August ISM® Manufacturing PMI®: 54.6% — eighth month of expansion.
• New orders, production, employment, and exports all grew.
• Prices stayed elevated at 71.1%.
• Supplier deliveries slowed for the ninth straight month.
• Manufacturing continues expanding despite cooling in several subindexes.
• S&P Global and Trading Economics also show solid but moderating growth.

FAQ

Is U.S. manufacturing still expanding?
Yes, August marked the eighth consecutive month of expansion.

Why did the PMI® dip from July?
Cooling in new orders, employment, and imports contributed to the slight decline.

Are supply chains improving?
Yes, though slowly; supplier deliveries remain slow but are stabilizing.

What’s the biggest challenge?
Persistent price inflation and material shortages continue to pressure manufacturers.