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

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

US manufacturing activity surged in August, with the Institute for Supply Management (ISM) reporting that new orders rose to a 7-month high of 51.4. The ISM Manufacturing PMI, which measures the overall health of the manufacturing sector, also climbed to 53.3, indicating a robust expansion [1].

The increase in new orders, which are a key indicator of future production, suggests that manufacturers are optimistic about future demand. This trend is consistent with the broader economic recovery seen in other major economies, including the Eurozone and Japan [1].

The rise in new orders comes on the heels of strong performances in the services sector, which has been a key driver of economic growth. The S&P Global US Services PMI reached its highest level in the year-to-date, indicating a solid expansion in business activity [1].

However, the report also highlighted a significant increase in selling price inflation, which hit a three-year high. This could pose challenges for manufacturers as they navigate higher input costs and potential price increases for consumers [1].

Looking ahead, investors will be closely watching the manufacturing and retail sales data, as well as the upcoming inflation reports, which could influence future interest rate decisions [3]. The Federal Reserve's hesitancy over implementing cuts indicates a cautious approach to monetary policy, which could impact market sentiment.

In summary, the latest ISM Manufacturing PMI report indicates a strong rebound in US manufacturing activity, with new orders rising to a 7-month high. While the increase in selling price inflation is a concern, the overall trend suggests a resilient manufacturing sector poised for continued growth.

References:
[1] https://www.pmi.spglobal.com/
[2] https://www.businesstimes.com.sg/companies-markets/yangzijiang-shipbuilding-soars-6-5-back-new-orders-worth-us920-million
[3] https://www.investing.com/economic-calendar/#20250902