US ISM manufacturing new orders index rises to 7-month high of 51.4

US ISM manufacturing new orders index rises to 7-month high of 51.4

The Institute for Supply Management (ISM) Manufacturing PMI® Report for August 2025 indicates a notable increase in the New Orders Index, rising to a 7-month high of 51.4 percent. This growth, 4.3 percentage points higher than the July reading of 47.1 percent, signals a significant improvement in new orders within the manufacturing sector [1].

The overall manufacturing activity continued to contract in August, with the Manufacturing PMI® registering 48.7 percent, a 0.7-percentage point increase from July's 48 percent. This modest increase is largely attributed to the expansion in new orders, although production and employment indices remained in contraction [1].

The Production Index, which measures the output of goods produced, fell to 47.8 percent, down 3.6 percentage points from July. This contraction, coupled with the slight increase in the Employment Index to 43.8 percent, suggests that while new orders are growing, the sector is still struggling with production and employment levels [1].

The Prices Index remained in expansion territory, registering 63.7 percent, indicating that prices continued to rise, albeit at a slower rate compared to July's 64.8 percent. The Inventories Index also showed a slight improvement, rising to 49.4 percent, suggesting a marginal recovery in inventory levels [1].

The New Export Orders Index increased to 47.6 percent, a 1.5 percentage point rise from July, indicating a modest growth in export orders. However, the Imports Index contracted further, falling to 46.0 percent, reflecting a decline in import activities [1].

The report highlights the ongoing challenges faced by the manufacturing sector, including the impact of tariffs and global economic uncertainties. Respondents across various industries, such as Food, Beverage & Tobacco Products and Chemical Products, have expressed concerns about the financial implications of tariffs and the overall economic instability [1].

In summary, the August ISM Manufacturing PMI® Report shows a mixed picture for the U.S. manufacturing sector. While the New Orders Index reached a 7-month high, other key indices suggest continued contraction in production and employment, along with ongoing challenges in inventory management and pricing. The sector's resilience and adaptability will be crucial in navigating these uncertainties.

References
[1] https://www.prnewswire.com/news-releases/manufacturing-pmi-at-48-7-august-2025-ism-manufacturing-pmi-report-302543264.html