Manufacturing Extends Recovery with Increased Demand
Manufacturing growth eased in August, according to Markit’s final U.S. Manufacturing Purchasing Managers’ Index. The PMI declined from 53.7 in July to 53.1 in August, still indicating growth but at a slower rate than before. The decline was led by accelerating contraction in the stocks of purchases and stocks of finished goods components as firms reduced inventories. The backlogs of work component also fell into contraction between July and August.
Declines were also registered in major components like output and new export orders, which both expanded for the month but at a slower rate than before. Input prices also continued to climb, with increases in the price of raw materials like oil and steel, but overall inflation was below a recent peak seen in July. Responding to these price pressures, output prices increased more quickly, but, overall, movement was relatively slow.
Importantly, the new orders component increased, signaling expansion at a faster rate than before.