Manufacturing continues to claw its way back, as shown by new evidence on Tuesday. The Institute for Supply Management’s manufacturing index expanded from 54.2 in July to 56.0 in August, a 1.8 point bounce. Anything above 50 falls into expansion territory.
‘After the coronavirus (COVID-19) brought manufacturing activity to historic lows, the sector continued its recovery in August, the first full month of operations after supply chains restarted and adjustments were made for employees to return to work,’ ISM Chair Tim Fiore said in a statement.
The indicator fell to 41.5 in April, as the coronavirus pandemic took hold. Now, it is seeing the fastest pace of recovery since 2018. Manufacturing appears to be on track for that V shaped recovery that we were all promised.
Diving into the details, the production index notched up 1.2 points in August, to 63.3. New orders jumped by 6.1 points to 67.6. Prices also got a big boost, rising 6.3 points to 59.5. Each of these categories have experienced growth for three months in a row. Export orders reached 53.3 and imports were up to 55.6. Backlog orders gained 2.8 points, rising to 54.6.
Hiring is still down, due to safety precautions. The employment index grew by 2.1 points, but was still only at 46.4, squarely in contraction territory. There have been around a million layoffs each week since March.
15 industries reported growth in August. Wood products, plastics and rubber products, food, beverage, and tobacco products, and textile mills led the way. Printing, petroleum and coal, and furniture each saw downturns.