August 2024 Manufacturing ISM Report On Business Reports New Orders Contracted for the Fifth Consecutive Month

The Manufacturing ISM Report On Business is published monthly by the Institute for Supply Management (ISM), the largest supply management organization in the world, as well as one of the most respected. Economic activity in the manufacturing sector contracted in August for the fifth consecutive month and the 21st time in the last 22 months, say the nation's supply executives in the latest Manufacturing ISM Report On Business.

The U.S. manufacturing sector contracted for the fifth consecutive month in August, as the Manufacturing PMI registered 47.2 percent, up 0.4 percentage point compared to July’s reading of 46.8 percent.

ISM’s New Orders Index contracted in August for the fifth consecutive month, registering 44.6 percent, a decrease of 2.8 percentage points compared to July’s figure of 47.4 percent. The New Orders Index hasn’t indicated consistent growth since a 24-month streak of expansion ended in May 2022.

The Production Index continued in contraction territory in August, registering 44.8 percent, 1.1 percentage points lower than the July reading of 45.9 percent.

ISM’s Employment Index registered 46 percent in August, 2.6 percentage points higher than the July reading of 43.4 percent. The July and August readings are among the four lowest recorded since the index registered 43.7 percent in July 2020, early in the economic recovery; the others are 45.9 percent in February and 45 percent in July 2023.

Delivery performance of suppliers to manufacturing organizations was marginally slower in August, with the Supplier Deliveries Index registering 50.5 percent, a 2.1-percentage point decrease compared to the reading of 52.6 percent reported in July. This is the second month of slower deliveries after four consecutive months of faster deliveries.

The Inventories Index registered 50.3 percent in August, up a substantial 5.8 percentage points compared to the reading of 44.5 percent reported in July.

ISM’s Backlog of Orders Index registered 43.6 percent, a gain of 1.9 percentage points compared to the July reading of 41.7 percent, indicating order backlogs contracted for the 23rd consecutive month after a 27-month period of expansion.

The five manufacturing industries reporting growth in August are: Primary Metals; Petroleum & Coal Products; Furniture & Related Products; Food, Beverage & Tobacco Products; and Computer & Electronic Products. The 12 industries reporting contraction in August — in the following order — are: Textile Mills; Printing & Related Support Activities; Nonmetallic Mineral Products; Plastics & Rubber Products; Electrical Equipment, Appliances & Components; Fabricated Metal Products; Transportation Equipment; Wood Products; Machinery; Paper Products; Chemical Products; and Miscellaneous Manufacturing.