However, the sector is at its lowest rate since June 2020
According to the Institute for supply Management report the “Manufacturing ISM Report on Business” the US manufacturing sector grew in August at the same rate as in July — which was the lowest rate in more than two years. While employment in manufacturing picked up, concerns about a slowing economy have remained.
The Manufacturing PMI report is based on a survey of manufacturing supply executives.
Overall, the ISM’s Manufacturing PMI’s reading of 52.8% in both August and July was the lowest level since its 52.4% reading in June 2020. Readings above 50% indicate expansion in the US manufacturing sector.
August’s reading also indicates expansion in the overall economy for the 27th month in a row after contracting in April and May 2020, said Timothy Fiore, chair of the ISM’s Manufacturing Business Survey Committee.
Respondents noted price expansion eased dramatically; however, they continued to express unease about a softening economy.
Employment was a bright spot.
The measure of employment in the report returned to expansion in August after three months of contractions. It was at a reading of 54.2% in August, up from 49.9% in July. Readings above 50.5% over time is generally consistent with an increase in US Bureau of Labor Statistics data on manufacturing employment.
Timothy Fiore, Chair of the ISM’s Manufacturing Business Survey Committee commented: “According to Business Survey Committee respondents’ comments, companies continued to hire at strong rates in August, with few indications of layoffs, hiring freezes or head-count reductions through attrition. Panelists reported lower rates of quits, a positive trend.”