US manufacturing activity jumps to more than four-year high in July
With business inventories at very low levels, there is ample room for manufacturing to expand.
US manufacturing activity surged to its highest level in over four years in July, according to the Institute for Supply Management (ISM). The manufacturing purchasing managers' index (PMI) reached 55.6, the highest reading since May 2022, indicating strong growth in the sector. This increase was driven by strong order growth and front-loading of orders by businesses to avoid higher prices and shortages resulting from the US-Israeli conflict with Iran.
The ISM survey also revealed a rebound in business inventories, with factory production growing at its fastest pace in four years in the second quarter. Despite supply constraints and elevated input costs, strong demand and high employment levels in manufacturing contributed to the sector's growth.
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