US manufacturing PMIs continue to expand in August

1st Sep 2026 15:11

(Sharecast News) - US factory activity continued to expand in August, with both the ISM and S&P Global manufacturing PMIs signalling further growth even as demand, output and supply‑chain conditions showed signs of cooling.

The Institute for Supply Management's manufacturing PMI eased to 54.6 in August, down from 55.6 in July, but still marking an eighth straight month of growth.

New orders, production and employment all remained in growth territory, though each slowed from July, with the new‑orders index slipping three points to 53.7, while production edged down to 58.3 and employment to 51.2.

Backlogs also softened, falling to 51.8, while supply chain pressures persisted as supplier deliveries rose to 59.3, indicating lengthening lead times for a ninth straight month. Inventories dipped slightly to 50.6, while customers' inventories remained firmly in "too low" territory at 42.8, a backdrop typically seen as supportive for future output.

Price pressures stayed elevated, with the prices index unchanged at 71.1, while export orders ticked up to 53.2 and imports eased to 52.5.

The ISM said sentiment among respondents skewed more negative in August, with pricing volatility, the Iran conflict, longer lead times and tariff concerns frequently cited.

Fifteen industries reported growth during the month, led by primary metals, electrical equipment and miscellaneous manufacturing, while wood products and chemicals contracted.

On a separate note, S&P Global said its August manufacturing PMI held steady at 53.9, signalling another month of solid expansion even as demand and output growth softened amid persistent supply pressures.

Firms reported that higher prices and tight supply chains continued to weigh on momentum. Manufacturers also built inventories of inputs and finished goods to guard against further price rises and delivery delays, though lead times lengthened again and hampered stock‑building efforts.

Output rose for a fifteenth straight month but at the weakest pace since February, supported mainly by domestic orders and precautionary inventory accumulation.

New orders increased at a similar pace to July, driven almost entirely by the domestic market, while export sales fell for a fourteenth consecutive month. Backlogs of work rose again as material shortages and fuller pipelines strained capacity.

Despite the softer demand backdrop, business confidence strengthened to a three‑month high, underpinning the fastest job creation recorded so far in 2026.

Improved optimism about the year-ahead outlook for PMI input prices production also supported employment growth.

Reporting by Iain Gilbert at Sharecast.com