August PMI Increases to 58.8 Percent

Written by Tim Triplett

Economic activity in the manufacturing sector expanded again in August as the Institute for Supply Management’s PMI registered 58.8 percent, an increase of 2.5 percentage points from July. This indicates growth in manufacturing for the 12th consecutive month and is the highest reading since April 2011, reports ISM. Any reading above 50 percent indicates expansion.

Following are other findings of ISM’s August survey of corporate purchasing managers, compared with the prior month: the New Orders Index registered 60.3 percent, a decrease of 0.1 percentage point; the Production Index registered 61 percent, a 0.4 percentage point increase; the Employment Index registered 59.9 percent, an increase of 4.7 percentage points; and the Inventories Index registered 55.5 percent, an increase of 5.5 percentage points. The Prices Index registered 62 percent in August, the same reading as July, indicating higher raw materials prices for the 18th consecutive month.

Comments from the panel reflect expanding business conditions, with new orders, production, employment, backlogs and exports all growing in August. Of the 18 manufacturing industries polled, 14 reported growth in August. Primary metals was among three reporting contraction.

The average PMI for January through August of 56.7 percent corresponds to a 4.2 percent increase in real GDP on an annualized basis, according to ISM calculations.

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