Economic activity in the manufacturing sector expanded in August, and the overall economy grew for the fourth consecutive month — after dipping significantly due to the coronavirus — say the nation’s supply executives in the latest Manufacturing ISM Report on Business.
The August PMI registered 56%, up 1.8% from the July reading of 54.2%. The New Orders Index registered 67.6%, an increase of 6.1% from the July reading of 61.5%. The Production Index registered 63.3%, up 1.2% compared to the July reading of 62.1%. The Backlog of Orders Index registered 54.6%, an increase of 2.8% compared to the July reading of 51.8%. The Employment Index registered 46.4%, an increase of 2.1% from the July reading of 44.3%. The Supplier Deliveries Index registered 58.2%, up 2.4% from the July figure of 55.8%.
The Inventories Index registered 44.4%, 2.6% lower than the July reading of 47%. The Prices Index registered 59.5%, up 6.3% compared to the July reading of 53.2%. The New Export Orders Index registered 53.3%, an increase of 2.9% compared to the July reading of 50.4%. The Imports Index registered 55.6%, a 2.5-percentage point increase from the July reading of 53.1%.
“Impacted by the current economic environment, many panelists’ companies are holding off on capital investments for the rest of 2020,” said Timothy R. Fiore, chair of the Institute for Supply Management Manufacturing Business Survey Committee. “In addition, (1) commercial aerospace equipment companies, (2) office furniture and commercial office building subsuppliers and (3) companies operating in the oil and gas markets — as well as their supporting supply bases — are and will continue to be impacted due to low demand. These companies represent approximately 20% of manufacturing output. This situation will likely continue at least through the end of the year.”
Of the 18 manufacturing industries, 15 reported growth in August, in the following order: Wood Products; Plastics & Rubber Products; Food, Beverage & Tobacco Products; Textile Mills; Chemical Products; Computer & Electronic Products; Primary Metals; Fabricated Metal Products; Machinery; Apparel, Leather & Allied Products; Nonmetallic Mineral Products; Miscellaneous Manufacturing; Electrical Equipment, Appliances & Components; Paper Products; and Transportation Equipment. The three industries reporting contraction in August are: Printing & Related Support Activities; Petroleum & Coal Products; and Furniture & Related Products.