US Manufacturing Index Expands in August

A major measure of U.S. manufacturing expanded in August, advancing 0.8 percentage points, defying forecasts of a decline in a slowing U.S. economy, according to the purchasing managers’ index published by the Institute for Supply Management.

ISM’s widely watched manufacturing index rose to 56.3 in August from 55.5 in July. It was the 13th straight month above 50, the line that indicates growth. Economists polled by Thomson Reuters had forecast a weaker reading of 53.

Manufacturing has been a bright spot in the economic recovery. Rising exports and demand from businesses for capital equipment and supplies have increased factory production for a year.

By The Numbers: ISM Monthly U.S. Manufacturing Index.

While momentum had slowed this summer, the ISM survey also shows manufacturing managers' desire to hire increased last month. ISM’s employment index rose to 60.4 in August from 58.6 in July.

Manufacturers’ inventories index registered 51.4 in August, indicating slight expansion, compared with 50.2 in July. The index of customers’ inventories rose to 43.5 in August from 39 in July but was below 50 for the 17th consecutive month, indicating that manufacturers’ believe their customers’ inventories are too low.

New export orders registered 55.5, down from 56.5 in July but still representing the 14th consecutive month of expansion. Imports of materials by manufacturers grew for the 12th straight month and registered 56.5, up from 52.5 in July.

Eleven of the 18 manufacturing sectors in the ISM index reported overall manufacturing growth, led by primary metals; apparel, leather and allied products; transportation equipment; fabricated metal products; electrical equipment, appliances and components; miscellaneous manufacturing; computer and electronic products; paper; chemicals; food, beverage and tobacco products; and printing and related support activities.

-- Contact Joseph Bonney at jbonney@joc.com.