U.S. manufacturing showed signs of renewed strength in August, driven by rising new orders and accelerated production. According to new data from S&P Global, the U.S. Manufacturing Purchasing Managers’ Index (PMI) surged to 53.0, marking the highest reading since mid-2021 and a sharp rebound from July’s 49.8.
The report indicates a significant turnaround in factory activity, with robust hiring and increased demand prompting many firms to expand output. Chris Williamson, chief economist at S&P Global, noted that the rebound was fueled in part by stockpiling in anticipation of further tariffs and supply disruptions. Manufacturers also reported a sharp increase in output prices, driven by rising input costs linked directly to tariffs.
S&P’s report offers a cautiously optimistic outlook for the industrial economy, especially in the domestic market. Companies with less exposure to global exports and more direct sales to U.S. consumers appear to be faring better amid ongoing global trade volatility.
At the same time, a separate report from the Institute of Supply Management (ISM) offered a more tempered assessment. ISM’s Manufacturing PMI rose slightly to 48.7 in August, still below the 50-point threshold that indicates growth. This marks the sixth consecutive month of contraction for the sector, according to ISM data.
However, ISM’s New Orders Index rose to 51.4, its first expansion since February, signaling that underlying demand may be stabilizing. Employment and production figures, however, remained in decline. Some manufacturers surveyed by ISM cited layoffs, hiring freezes, and weakened export demand as key concerns.
Both reports pointed to tariff-driven inflation as a persistent issue. Rising material costs and global uncertainty continue to weigh on investment decisions, with some firms delaying capital expenditures due to unpredictable supply chain conditions.
Despite conflicting signals, the data suggest that while U.S. manufacturing remains under pressure, momentum may be building—particularly among firms focused on the domestic market.
