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Manufacturing Holding Its Own

The U.S. manufacturing sector remained stuck in neutral during August, as one key gauge of activity dipped but not as deeply as projected, and the rate of manufacturing growth slowed after perking up somewhat in July.

A monthly barometer of smoke-stack America compiled by the nation’s purchasing managers declined slightly, to a reading of 54.5 from 54.7 the month before, but managed to come in ahead of expectations, beating a consensus forecast of an even deeper drop, to a reading of 53.5.

“The major concerns in manufacturing at this point are the continued upward pricing pressure that has existed for the past 13 months, and some industries are experiencing a degree of inventory buildup,” said Norbert Ore, chairman of the Manufacturing Business Survey Committee of the Institute for Supply Management.

Providing some relief to manufacturers, prices, while still rising, climbed at a somewhat slower pace during August. The key Prices Index subsided to a level of 73.0 from 78.5 the month before. Any reading over the benchmark level of 50 indicates growth, while anything beneath a level of 50 indicates contraction. A measure of customers’ inventories increased by 1.5%, to a level of 46.0 from 44.5.

New orders and production, while still growing, cooled off somewhat, with the New Orders Index slipping by 1.9% to a reading of 54.2, and the Production Index slipping by 1.0% to 56.6 from 57.6 in July.

Providing some relief, the Employment Index climbed by 3.3%, to 54.0% from 50.7%. In more good news, the Exports Index jumped up by 3.8% to 55.7 from 51.9, while the rate of imports growth slowed by 3.5% to a level of 54.0 from 57.5

August Snapshot
Manufacturing benchmarks Month-over-month percentage point change

Source: Institute for Supply Management
Purchasing Managers’ Index -0.2%
New Orders 1.9
Production -1.0
Employment 3.3
Inventories -0.3
Customers’ Inventories 1.5
Prices Manufacturers Pay -5.5
Order Backlogs 1.0
Export Orders 3.8
Imports -3.5


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