The U.S. manufacturing sector marked its sixth consecutive month of contraction in August, but it shrank at a slightly slower rate than last month, according to the Institute for Supply Management (ISM).
Specifically, the group’s “ISM Manufacturing PMI” registered 48.7 percent in August, a 0.7-percentage point increase compared to the 48 percent recorded in July. Meanwhile, the overall economy continued in expansion for the 64th month after one month of contraction in pandemic-era April, 2020, the Tempe, Arizona-based not-for-profit professional supply management organization found.
“Regarding output, the Production Index returned to contraction and the Employment Index edged up slightly, as panelists indicated that managing head counts is still the norm at their companies, as opposed to hiring,” Susan Spence, chair of the ISM’s Manufacturing Business Survey Committee, said in a release.
“Finally, inputs (defined as supplier deliveries, inventories, prices and imports), on net, declined further into contraction territory. The Inventories Index improved slightly but is still in contraction territory, the Supplier Deliveries Index indicated slower deliveries, and prices continued to increase, but at a slower rate. The Imports Index moved further into contraction,” Spence said.
For additional context, the rise of the index number to 48.7 may suggest that manufacturing activity contracted at a slightly slower pace, but the reading still fell short of the 49.0 consensus forecast and marked the sixth consecutive month of contraction. This comes after a brief two-month expansion earlier in 2025, which itself followed more than two years of persistent declines, according to the financial news website Connect Money.
