August 2021 Manufacturing ISM Report On Business Indicates Strong Sector Expansion Continues

By Steve Clouther

Industry Trends

The Manufacturing ISM Report On Business is published monthly by the Institute for Supply Management (ISM), the largest supply management organization in the world, as well as one of the most respected.  Economic activity in the manufacturing sector grew in August, with the overall economy notching a 15th Manufacturing ISM Reportconsecutive month of growth, say the nation's supply executives in the August 2021 Manufacturing ISM Report On Business.

Manufacturing grew in August, as the Manufacturing PMI registered 59.9 percent, 0.4 percentage point higher than the July reading of 59.5 percent, indicating continued strong sector expansion.

ISM’s New Orders Index registered 66.7 percent in August, up 1.8 percentage points compared to the 64.9 percent reported in July. This indicates that new orders grew for the 15th consecutive month.

The Production Index registered 60 percent in August, 1.6 percentage points higher than the July reading of 58.4 percent, indicating growth for the 15th consecutive month.

ISM’s Employment Index registered 49 percent in August, 3.9 percentage points below the July reading of 52.9 percent, thus returning to contraction territory after one month above 50 percent.

The delivery performance of suppliers to manufacturing organizations was slower in August, as the Supplier Deliveries Index registered 69.5 percent, 3 percentage points lower than the 72.5 percent reported in July and the third straight month of slowing expansion.

The Inventories Index registered 54.2 percent in August, 5.3 percentage points higher than the 48.9 percent reported for July, returning to expansion territory after one month of contraction.

ISM’s Backlog of Orders Index registered 68.2 percent in August, a 3.2-percentage point increase compared to the 65 percent reported in July, indicating order backlogs expanded for the 14th straight month.

The 15 manufacturing industries reporting growth in August — in the following order — are: Furniture & Related Products; Computer & Electronic Products; Machinery; Primary Metals; Electrical Equipment, Appliances & Components; Fabricated Metal Products; Plastics & Rubber Products; Chemical Products; Miscellaneous Manufacturing; Food, Beverage & Tobacco Products; Transportation Equipment; Wood Products; Printing & Related Support Activities; Paper Products; and Petroleum & Coal Products. The two industries reporting a decrease in August compared to July are Textile Mills; and Nonmetallic Mineral Products.

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