Key facts
- US manufacturing activity expanded in July at its fastest rate in over four years.
- The ISM purchasing managers index registered 55.6 in July, up from 53.3 in June.
- This is the seventh consecutive month of growth and the highest reading since May 2022.
- Production, new orders, and employment indices all showed expansion.
- The price index remained high at 71.1, indicating sustained inflationary pressures.
Economic activity in the US manufacturing sector expanded in July at its fastest rate in more than four years, with the Institute for Supply Management's (ISM) purchasing managers index rising to 55.6. This marks the seventh consecutive month of growth and the highest reading since May 2022, indicating a significant acceleration in the sector.
The production index surged to 58.5 in July, its highest level since November 2021, and the new orders index also increased to 56.7, continuing a seven-month expansionary trend. New export orders also returned to growth, reaching 53.
Despite some concerns over geopolitical risks in the Middle East impacting commodity and energy markets, leading to increased costs and transit times for rerouted shipments, the price index remained elevated at 71.1. This indicates continued inflationary pressures, with commodities like aluminum, copper, steel, and fuel seeing price increases.
The employment index rose to 52.8, signaling the first expansion in manufacturing employment in 33 months. Inventories saw a slight decrease, with the index edging down to 51.2, suggesting a slowing growth in stock levels.