Economic activity in the manufacturing sector expanded in August, and the overall economy grew for the 112th consecutive month, according to U.S. supply executives in the latest Manufacturing ISM Report on Business.

The report was issued by Timothy R. Fiore, chair of the ISM Manufacturing Business Survey Committee, who commented, “The August PMI registered 61.3%, an increase of 3.2 percentage points from the July reading of 58.1%. The New Orders Index registered 65.1%, an increase of 4.9 percentage points from the July reading of 60.2%. The Production Index registered 63.3%, a 4.8-percentage point increase compared to the July reading of 58.5%.

“The Employment Index registered 58.5%, an increase of 2 percentage points from the July reading of 56.5%. The Supplier Deliveries Index registered 64.5%, a 2.4-percentage point increase from the July reading of 62.1%. The Inventories Index registered 55.4%, an increase of 2.1 percentage points from the July reading of 53.3%. The Prices Index registered 72.1% in August, a 1.1-percentage point decrease from the July reading of 73.2%, indicating higher raw materials prices for the 30th consecutive month.

“Comments from the panel reflect continued expanding business strength. Demand remains strong, with the New Orders Index at 60% or above for the 16th straight month, and the Customers’ Inventories Index remaining low. The backlog of Orders Index continued to expand, at higher levels compared to the previous month. Consumption improved, with production and employment continuing to expand, at higher levels compared to July, despite shortages in labor and materials. Inputs (expressed as supplier deliveries, inventories and imports) expanded strongly due to continuing supply chain inefficiencies, positive increases in inventory levels and a slight easing of imports. Lead-time extensions, steel and aluminum disruptions, supplier labor issues and transportation difficulties continue, but at more manageable levels.

“Export orders expanded at stable levels. Prices pressure continues, but the index softened for the third straight month and remains above 70. Demand is still robust, but the nation’s employment resources and supply chains continue to struggle. Respondents are again overwhelmingly concerned about tariff-related activity, including how reciprocal tariffs will impact company revenue and current manufacturing locations. Panelists are actively evaluating how to respond to these business changes, given the uncertainty,” said Fiore.