US August Manufacturing PMI at 47.2 Indicates Weakness... Concerns Over Economic Downturn

Market Outlook (47.5) Falls Short... Contraction for 5 Consecutive Months

Last month, the U.S. manufacturing sector continued to contract as economic indicators fell short of expectations. Although employment improved, factory operations remained sluggish, raising renewed concerns about a downturn in the manufacturing economy.

On the 3rd (local time), the Institute for Supply Management (ISM) announced that the August Manufacturing Purchasing Managers' Index (PMI) stood at 47.2. This was an increase from 46.8 in the previous month but fell short of the expert forecast of 47.5.

The manufacturing PMI, a key leading economic indicator, signals expansion when above 50 and contraction when below 50. With the ISM manufacturing PMI remaining below 50 for five consecutive months, it indicates a continued contraction phase in the manufacturing sector, which accounts for 10.3% of the U.S. economy.

The manufacturing new orders sub-index, a component of the PMI, declined from 47.4 in July to 44.6 in August. The manufacturing production index also fell from 45.9 to 44.8 during the same period. In contrast, manufacturing employment rose from 43.4 to 46.

On the same day, S&P Global released its August manufacturing PMI, which also showed continued contraction. S&P Global’s August manufacturing PMI recorded 47.9, falling short of both the previous month’s 49.6 and the forecast of 48.