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ISM: US manufacturing contracts in August

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ISM: US manufacturing contracts in August

Decrease in activity disappoints.

According to the widely watched Manufacturing ISM Report on Business, economic activity in the manufacturing sector contracted in August, following five consecutive months of moderate expansion.

The August PMI registered 49.4%, a decrease of 3.2 percentage points over the July reading of 52.6%.  (Results over 50% indicate expansion.)

Analysts had expected the PMI to fall slightly to 52.2%.

Analysts had expected the PMI to fall slightly to 52.2%.

The New Orders Index registered 49.1%, a decrease of 7.8 percentage points from July. The Production Index came in at 49.6%, 5.8 percentage points below the July reading of 55.4%.

The employment picture took a hit as well, with the Employment Index coming in at 48.3%, 1.1 percentage points below July’s 49.4%.

The Prices Index decreased 2 percentage points to 53%, indicating higher raw materials prices for the sixth consecutive month.

Bradley J. Holcomb, CPSM, CPSD, chair of the Institute for Supply Management Manufacturing Business Survey Committee, noted that “Manufacturing contracted in August for the first time since February of this year, as only six of our 18 industries reported an increase in new orders in August (down from 12 in July), and only eight of our 18 industries reported an increase in production in August (down from nine in July)."

 

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