4 September 2010 | Angeline Albert
Manufacturing activity in the US continues to grow with new orders and jobs on the rise, the latest monthly PMI report from the Institute for Supply Management (ISM) shows.
Economic activity in the sector expanded in August for the 13th consecutive month, according to the latest Report on Business, which is based on data from purchasing and supply executives in the US.
The PMI showed a slightly stronger performance on July’s reading of 55.5, registering 56.3. A reading above 50 indicates expansion.
In terms of month-on-month improvement, job and production indices experienced the greatest gains.
August is the ninth consecutive month of growth in the number of jobs in the sector. The employment index climbed to 60.4 in August. It was 58.6 in July. Ten of the 18 manufacturing industry sub sectors reported employment growth in August, with only furniture and related products reporting a drop.
A total of 11 of the 18 sub sectors reported growth in business activity in August, with primary metals, leather and transportation equipment seeing the highest rates. Other growth areas included food and drinks, electrical equipment and computer and electronic goods.
Norbert Ore, chair of the ISM manufacturing business survey committee, said: “The average PMI for January to August (57.8 per cent) corresponds to a 5.3 per cent increase in real gross domestic product (GDP). In addition, if the PMI for August (56.3 per cent) is annualised, it corresponds to a 4.8 per cent increase in real GDP annually.”
Meanwhile, there was continued growth in the non-manufacturing sector, which rose for the eighth consecutive month in August, but at a slower rate than before. According to the latest non-manufacturing Report On Business, also out this week, the index registered 51.5, 2.8 percentage points lower than July’s figure.
Prices paid for materials and services increased at a significantly faster rate than in July, with the non-manufacturing prices index coming in at 60.3, 7.6 percentage points higher than the previous month.