The manufacturing sector saw another surge in August, with the global economy recording a 15th consecutive month of growth, according to the latest reading of the Institute for Supply Management (ISM) index.
“The August manufacturing PMI was 59.9%, an increase of 0.4 percentage point from the July reading of 59.5%,” ISM President Timothy R. Fiore said. . “This figure indicates an expansion of the overall economy for the 15th consecutive month after the April 2020 contraction.
The index showed new orders rose 1.8 percent and production rose 1.6 percent from July.
But there are negatives. Employment fell 3.9% to 49, a return to contraction. Order books rose 3.2% – the 14th consecutive month of expansion. Raw material delivery times are also at an all time high.
“The panelists reported that their businesses and suppliers continue to struggle at unprecedented levels to meet growing demand,” Fiore continued. “All segments of the manufacturing economy are affected by record raw material supply times, continued shortages of critical raw materials, rising raw material prices and product transportation difficulties.
“New outbreaks of COVID-19 add to pandemic issues – worker absenteeism, short-term closures due to parts shortages, difficulties filling vacancies and overseas supply chain issues – which continue to limit the growth potential of manufacturing.
“However, the optimistic sentiment of the panel remained strong, with eight positive comments for each cautious comment,” he added.
Of the 18 manufacturing industries, 14 reported growth in new orders, with furniture leading the charge. 16 industries reported paying higher prices for raw materials, including furniture.
Furniture makers say:
“Reservations / sales continue to be strong. Persistent supply issues – including material availability, freight / logistics / containers, and key product allocation – continue to hamper the ramping up of production to meet demand. Also struggling with the lack of manpower in several factories. are still inflationary, but price increases have stabilized. “
Another notable finding according to the index is that lumber is the only material that is falling in price. All other products – from cement adhesives to electronic components to rubber products and steel – have seen an increase.
See the full report here.