Apparel, leather and allied products, and textile mills were among the 14 industries reporting growth in imports in August

Apparel, leather and allied products, and textile mills were among the 14 industries reporting growth in imports in August

Economic activity in the US manufacturing sector grew in August, with the apparel sector reporting growth in imports and inventories, new figures show.

The latest Institute for Supply Management (ISM) Manufacturing Report On Business, which surveys supply management professionals, shows economic activity notched up its fourth consecutive month of growth thanks to rising orders and production, and exports and imports.

Manufacturing activity grew in August as the PMI (Purchasing Managers' Index) registered 56%, up 1.8 percentage points from the July reading of 54.2%.

"This figure indicates expansion in the overall economy for the fourth month in a row after a contraction in April, which ended a period of 131 consecutive months of growth," says Timothy Fiore, chair of the Institute for Supply Management (ISM) Manufacturing Business Survey Committee.

The New Orders Index registered 67.6%, an increase of 6.1 percentage points from the July reading of 61.5%, while the Production Index registered 63.3%, up 1.2 percentage points on the July reading of 62.1%. The Backlog of Orders Index registered 54.6%, an increase of 2.8 percentage points.

A reading above 50% indicates that the manufacturing economy is generally expanding; below 50% indicates that it is generally contracting.

ISM's Imports Index registered 55.6% in August, up 2.5 percentage points compared to 53.1% in July, expanding for the second consecutive month thanks to increased US factory demand. The index reached its highest level of expansion since June 2018, when it registered 59%.

Apparel, leather and allied products, and textile mills did not report growth in new orders in August; although textile mills did see growth in production and employment, but slower supplier deliveries during the month.

Apparel, Leather & Allied Products was one of just two industries reporting higher inventories in August, and customers' inventories as too low. Textile Mills; Apparel, Leather & Allied Products both said they were paying increased prices for raw materials in August.

Textile Mills reported growth in new export orders in August, but there was no change for Apparel, Leather & Allied Products.

And reflecting increased US factory demand, growth in imports was reported by the Textile Mills and Apparel, Leather & Allied Products industries.

"After the coronavirus (Covid-19) brought manufacturing activity to historic lows, the sector continued its recovery in August, the first full month of operations after supply chains restarted and adjustments were made for employees to return to work," Fiore continued. "Survey Committee members reported that their companies and suppliers operated in reconfigured factories, with limited labour application due to safety restrictions."