2025-09-03
US ISM Manufacturing PMI in August Contracts for Sixth Consecutive Month, New Orders Rebound Signals Mixed Outlook
The US ISM Manufacturing Purchasing Managers' Index (PMI) for August was 48.7, up from 48 in July, but still below the 50 expansion-contraction threshold. Manufacturing activity has contracted for six consecutive months. This indicates continued pressure on the US manufacturing sector. However, the new orders index showed a significant rebound, rising to 51.4 from 47.1 in July, marking the largest monthly increase in nearly a year, suggesting demand in some industries is beginning to recover.
Detailed ISM manufacturing index components for August include (MoM) :
Production index dropped from 51.4 to 47.8, signaling slowing output.
Employment index slightly rose to 43.8 but remains at weak levels.
Supplier deliveries rose to 51.3, indicating slower delivery times and ongoing supply chain challenges.
Inventory index edged up to 49.4, while customer inventories fell to 44.6, showing reduced inventory pressures downstream.
Price index declined to 63.7 but stayed elevated, pointing to ongoing cost pressures.
Backlog orders and export orders showed contraction, at 44.7 and 47.6 respectively, reflecting weak order flows.
Overall, the August ISM Manufacturing PMI continued to contract, with challenges in production and employment. However, new orders rebounded and AI investments provided some support. The US remains in a high interest rate environment (federal funds rate around 4.25% to 4.5%), though the market expects the Fed to start cutting rates in the coming months. Meanwhile, other surveys like the S&P Global PMI show growth, highlighting mixed economic signals. Ongoing monitoring of global and domestic demand is essential to gauge manufacturing’s outlook.
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