National manufacturing activity slows in August

First industry contraction since February

manufacturing activity

The Institute for Supply Management’s PMI registered 49.3 percent in August, indicating a contraction in the nation’s manufacturing sector for the first time since February.

manufacturing activity

It was also the second straight month of decline for the index, which was at 52.6 in July and 53.2 in June. A reading above 50 indicates the industry is growing.

Nearly all of the components in the ISM’s monthly Report on Business were also trending in a downward direction in August. The index for new orders was down 7.8 percent, production was down 5.8 percent and employment was down 1.1 percent. All three indices went from growing to contracting during the month.

While the report’s numbers were not positive, respondents to ISM’s survey did express some optimism tied to specific industry.

A food and beverage respondent said new product distribution was increasing, while another manufacturer said medical devices remained a strong area. A fabricated metal products producer said strong commercial construction was boosting business, as did a nonmetallic mineral products respondent.

A plastics and rubber products respondent said low unemployment was making it difficult to find production employees, leading to a lot of overtime.

Manufacturing employment in July was down 31,000 compared with July 2015 at 12.3 million. That figure includes a 54,000 employee drop in production and nonsupervisory positions to 8.6 million.

Wisconsin’s manufacturing employment is up 6,400 over that time frame to 474,000, according to preliminary numbers from the U.S. Bureau of Labor Statistics.

National employment data for August is set to be released Friday.

Read more economic data reports at the BizTracker page.

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Arthur Thomas
Arthur covers banking and finance and the economy at BizTimes while also leading special projects as an associate editor. He also spent five years covering manufacturing at BizTimes. He previously was managing editor at The Waukesha Freeman. He is a graduate of Carroll University and did graduate coursework at Marquette. A native of southeastern Wisconsin, he is also a nationally certified gymnastics judge and enjoys golf on the weekends.

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