ISM Manufacturing PMI — August 2026
Headline: The Manufacturing PMI fell 1.0 point to 54.6, indicating continued expansion—though at a slower rate—for the eighth consecutive month. The reading was above the six-month average of 53.4, but below the six-month range high of 55.6. It remained well above the manufacturing breakeven of 50 and the overall-economy breakeven of 47.5, consistent with continued broader economic growth.
Sub-indices:
| Index | Level | Prior | Change | Direction | vs 6-mo |
|---|---|---|---|---|---|
| New Orders | 53.7 | 56.7 | -3.0 | Growing | below avg (55.5) |
| Production | 58.3 | 58.5 | -0.2 | Growing | above avg (54.5) |
| Employment | 51.2 | 52.8 | -1.6 | Growing | above avg (49.2) |
| Supplier Deliveries | 59.3 | 58.9 | +0.4 | Slowing | above avg (58.6) |
| Inventories | 50.6 | 51.2 | -0.6 | Growing | above avg (49.6) |
| Customers' Inventories | 42.8 | 40.7 | +2.1 | Too Low | 6-mo high |
| Prices | 71.1 | 71.1 | 0.0 | Increasing | below avg (76.6) |
| Backlog of Orders | 51.8 | 55.0 | -3.2 | Growing | below avg (53.4) |
| New Export Orders | 53.2 | 53.0 | +0.2 | Growing | 6-mo high |
| Imports | 52.5 | 55.7 | -3.2 | Growing | below avg (53.2) |
Key moves:
- Customers’ Inventories rose to a six-month high of 42.8, remaining well below 50 and indicating unusually lean customer stock levels.
- New Export Orders reached a six-month high of 53.2, despite only a modest monthly increase.
- New Orders fell 3.0 points to 53.7, its lowest level in the six-month window and below its 55.5 average; Backlog also declined sharply and remained below average.
Insights:
- The demand mix softened materially: New Orders are still expanding, but their decline to 53.7 and Backlog’s drop to 51.8 point to less forward momentum. Production remained robust at 58.3, suggesting near-term output is holding up better than incoming demand.
- The 50.6 Inventories reading is marginally expansionary, but the simultaneous decline in New Orders argues against viewing the build as purely deliberate stocking; it carries some risk of an involuntary accumulation if demand continues to cool.
- Customers’ Inventories at 42.8—a six-month high but still “Too Low”—is a constructive counter-signal. Lean downstream stocks should support replenishment demand and provide a future production cushion.
- Supplier Deliveries at 59.3 indicate slower deliveries and sit above their six-month average, consistent with continued demand or supply-chain tightness rather than excess manufacturing slack. Employment remained above 50 at 51.2, but growth slowed.
- Prices held at an elevated 71.1, signaling persistent input-cost pressure. The level is below the six-month average of 76.6, but still implies ongoing margin and goods-inflation risks.
Breadth & prices: All 15 reported industries expanded, while none contracted. Input prices continued to increase, with the Prices Index unchanged at 71.1.
Takeaway: August confirms a durable manufacturing expansion, but the decline in New Orders and Backlog points to moderating cycle momentum beneath strong current production. Lean customer inventories and firm export orders support the outlook, while elevated prices and slower deliveries remain the principal inflation and margin concerns.
