US Manufacturing PMI® Registers 54.6% in August 2026, Eighth Consecutive Month of Expansion

The ISM Manufacturing PMI registered 54.6 percent in August 2026, down 1 percentage point from July's reading of 55.6 percent, marking the eighth consecutive month of expansion in the manufacturing sector, according to the ISM Manufacturing PMI Report released September 1, 2026. The overall economy continued in expansion for the 22nd consecutive month, with the August reading corresponding to an estimated 2.4-percent increase in real GDP on an annualized basis.

All five subindexes feeding directly into the PMI stayed in expansion: New Orders came in at 53.7 percent, down 3 points from July's 56.7 percent; Production registered 58.3 percent, its 10th straight month of expansion; Employment fell 1.6 points to 51.2 percent; Supplier Deliveries rose 0.4 point to 59.3 percent, indicating slower deliveries for the ninth consecutive month; and Inventories registered 50.6 percent. The Prices Index held at an elevated 71.1 percent, unchanged from July, while the Backlog of Orders Index fell 3.2 points to 51.8 percent, New Export Orders edged up 0.2 point to 53.2 percent, Imports declined 3.2 points to 52.5 percent, and Customers' Inventories rose 2.1 points to 42.8 percent, still in "too low" territory.

In August, 22 percent of manufacturing GDP contracted, compared with 20 percent in July, and 2 percent was in strong contraction versus zero percent in July, with Wood Products and Chemical Products the two industries reporting contraction. Sentiment among respondents was mixed, with 42 percent of comments positive and 58 percent negative; among negative comments, pricing volatility was cited in 57 percent, increasing lead times in 46 percent, the Iran war in 30 percent, and tariffs in 29 percent, with respondents also citing steel and aluminum prices, AI infrastructure-related supply chain strain, and Middle East uncertainty.