Manufacturing in U.S. Grows for 15th Month in a Row

Manufacturing in the United States grew for the 15^th month in a row during August, the latest poll of the Institute of Supply Chain Management Business Survey Committee found.

The August Manufacturing PMI® registered 59.9%, an increase of 0.4 percentage point from the July’s 59.5% with the New Orders Index climbing 1.8 percentage points to 66.7% and the Backlog of Orders Index up 3.2 percentage points to 68.2%.

Business Survey Committee panelists reported that their companies and suppliers continue to struggle at unprecedented levels to meet increasing demand, which is happening despite increased prices for nearly everything, Manufacturing Business Survey Committee Chair Timothy Fiore said.

The panelists said their companies are seeing the struggles in record-long raw-materials lead times, continued shortages of critical basic materials, rising commodities prices and difficulties in transporting products.

Manufacturing-growth potential is continued to being limited by Covid-19 issues such as worker absenteeism, short-term shutdowns due to parts shortages, difficulties in filling open positions and overseas supply chain problems

With the boom, an overwhelming majority of panelists indicate their companies are hiring or attempting to hire, but fewer of them are expressing difficulty in filling positions.

The Employment Index contracted in August to 49%, 3.9 percentage points lower than the month before.

The price increases of some building materials remain a dampening new construction, Dodge Data & Analytics reported last month.

“Lumber and copper prices have fallen in recent weeks; however, steel, plastic and other construction-related products are continuing their ascent, “the research firm’s chief economist Richard Branch said in a prepared statement. “These increases will continue to impact construction starts over the coming months, somewhat muting the impact of stronger economic activity.”

Despite the increases and economic uncertainties from the Delta variety of Covid-19, Branch noted construction projects entering the planning stage remain at levels not seen in several years.

Labor shortages are hitting particularly hard in new warehouse space.

Newmark has estimated more than 280,000 additional warehouse workers will be required to support activities within new facilities currently under construction—and notes that employees from other sectors are increasingly shifting to these types of jobs.

While warehousing and transportation employment has “nearly recovered” from COVID-era losses, attracting and retaining talent remains a challenge: “exploring concentrations of workers in industries other than warehouse and transportation with analogous barriers to entry and job contexts is key,” according to Newmark analysts.