US manufacturing continued growing in August, albeit at its slowest pace in over two years. The Institute for Supply Management’s gauge of factory remained at 52.8; its lowest level since June 2020.
Material costs continued to decline for a fifth consecutive month, bringing much-needed relief in the face of mounting inflationary pressures. This is due to recession concerns and a weaker global economy pulling down the price of commodities such as metals and oil.
SM’s Manufacturing Business Survey Committee reported that 10 manufacturing industries experienced growth for the month, with mineral products, petroleum, and transportation equipment leading the pack.
“Sentiment remained optimistic regarding demand, with five positive growth comments for every cautious comment,” Timothy Fiore, chair of ISM’s Manufacturing Business Survey Committee reflected. Still, Fiore warned that a weakening economy continues to pose a genuine concern.
The United States manufacturing sector fared better than a multitude of industries in other regions. Asian and European manufacturing industries continued to struggle as the war in Ukraine and an economic slowdown in China takes their toll.
Industry growth also seemed to boost employment figures, with the ISM’s employment gauge rising to a five-month high of 54.2.