U.S. manufacturing economy remains sluggish in August

The U.S. manufacturing sector reflects the same sluggishness in the overall economy, but remains in positive territory for the 25th consecutive month.

The Institute for Supply Management (ISM, Tempe, Ariz., USA) on Sept. 1 reported that economic activity in the U.S. manufacturing sector expanded in August 2011 for the 25th consecutive month, and the overall economy grew for the 27th consecutive month. ISM's Purchasing Managers Index (PMI) registered 50.6 percent, following a July value of 50.9 percent. A reading of more than 50 percent indicates that the manufacturing economy is generally expanding; less than 50 percent indicates that it is generally contracting.

The report was issued by Bradley J. Holcomb, CPSM, CPSD, chair of the Institute for Supply Management Manufacturing Business Survey Committee. “The PMI registered 50.6 percent, a decrease of 0.3 percentage point from July, indicating expansion in the manufacturing sector for the 25th consecutive month, at a slightly slower rate. The Production Index registered 48.6 percent, indicating contraction for the first time since May of 2009, when it registered 45 percent. The New Orders and Backlog of Orders Indexes edged up slightly from July, but both indexes are indicating contraction in August at slower rates than in July. The rate of increase in prices slowed for the fourth consecutive month, dropping another 3.5 percentage points in August to 55.5 percent. The overall sentiment is one of concern and caution over the domestic and international economic environment, which is affecting customers’ confidence and willingness to place orders, at least in the short term.” 

12-month ISM Manufacturing Index history (percent):

  • August 2011: 50.6
  • July 2011: 50.9
  • June 2011: 55.3
  • May 2011: 53.5
  • April 2011: 60.4
  • March 2011: 61.2
  • February 2011: 61.4
  • January 2011: 60.8
  • December 2010: 57.0
  • November 2010: 56.6
  • October 2010: 56.9
  • September 2010: 54.4