US manufacturing grew at a faster pace in August, boosted by a number of industries including textile and clothing production – but a new survey shows concerns continue to grow over trade.
Published by the Institute for Supply Management, the ‘Manufacturing ISM Report on Business’ shows US manufacturing recorded its 24th consecutive month of growth in August, jumping to 61.3% from 58.1% in July. Of the 18 manufacturing industries listed, 16 expanded, driven by producers of clothing, textiles, electronic equipment and paper products.
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The increase was thanks to new orders, production and inventory all growing faster in August. The New Orders Index registered at 65.1%, an increase of 4.9 percentage points from July, indicating growth in new orders for the 32nd consecutive month.
“Customer demand reversed a three-month softening of expansion,” says Timothy Fiore, chair of the ISM’s manufacturing survey committee. “New orders continued to expand at high levels, with the index at or above 60% for the 16th straight month.”
However, there are growing concerns over the US’s trade disputes with Canada and China, from which many manufacturers are battling supply chain disruptions. Tariffs on imported steel and aluminium have also raised costs for many producers.
“Export orders expanded at stable levels. Prices pressure continues, but the index softened for the third straight month and remains above 70,” adds Fiore. “Demand is still robust, but the nation’s employment resources and supply chains continue to struggle. Respondents are again overwhelmingly concerned about tariff-related activity, including how reciprocal tariffs will impact company revenue and current manufacturing locations. Panelists are actively evaluating how to respond to these business changes, given the uncertainty.”
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By GlobalDataMeanwhile, consumption improved, with production and employment continuing to expand, at higher levels compared to July, despite shortages in labour and materials. Inputs (expressed as supplier deliveries, inventories and imports) expanded strongly due to continuing supply chain inefficiencies, positive increases in inventory levels and a slight easing of imports. Lead-time extensions, steel and aluminium disruptions, supplier labour issues, and transportation difficulties continue, but at more manageable levels, the report noted.
