U.S. manufacturing business conditions rebound at weaker pace in August

Business conditions throughout the U.S. manufacturing sector continued to rebound in August, although at a softer rate. The IHS Markit Flash manufacturing PMI dropped to 52.2 in August, from 53.3 in July. This hints at just a modest pace of rebound. Subdued rises in output as well as in new orders were the main factors dragging the headline manufacturing PMI in the latest survey period.

Volumes of production grew at the slowest pace for 14 months in August, while new business growth softened from July’s four-month high. Consequently, purchasing activity grew at a weaker rate while companies also recorded slower rises in inventory levels.

The latest data hinted at a further rise in the pace of input price inflation at U.S. goods producers. Furthermore, average cost burdens grew at a strong rate that was the most rapid seen in four months. Panellists stated that higher prices for raw materials such as metals, oil and electrical components had added to higher production costs. But factory gate changes continued to increase at just a modest rate.

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