Economy: ISM Manufacturing Index for August 2018

Earlier today, the Institute for Supply Management® (ISM®) released their Manufacturing Purchasing Manager's Index (PMI®) for August 2018:

Predicted: 57.7%
Actual: 61.3%

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Previous month: 58.1%

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Every month, the ISM surveys purchasing and supply executives at hundreds of companies across the country who are involved in manufacturing in some form. The resulting index is watched closely by academics, economists and investors because manufacturing accounts for about 12% of U.S. Gross Domestic Product (GDP).

The PMI is a reliable barometer of U.S. manufacturing: A PMI above 50% implies that U.S. manufacturing expanded during the month specified, while a reading below 50% implies that the made-in-the-USA sector contracted.

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From Today's Report:

"...Economic activity in the manufacturing sector expanded in June, and the overall economy grew for the 112th consecutive month, say the nation’s supply executives in the latest Manufacturing ISM® Report On Business®..."

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The following is a sampling of quotes from a diverse pool of U.S. manufacturers:

'Busy for new orders, but the cost of raw material chemicals keeps going up.'
(Chemical Products)

'We have seen a slight uptick in international business. Suppliers do not seem to know how to handle the recently imposed tariffs. Most are waiting to re-evaluate potential price increases until September.'
(Computer + Electronic Products)

'Generally high levels of demand continue, and [we are] planning for this elevated rate through the rest of the year.'
(Transportation Equipment)

'Suppliers appear to be bracing us for cost increases, given increased talk of tariffs and inflation. We are budgeting for 2019 accordingly.'
(Food, Beverage + Tobacco Products)

'The toughest thing we deal with is the unknown. Dealing with tariffs on steel purchases and not knowing if or when they will end makes planning difficult. We are entering the period when we begin our pricing negotiations for next year and will likely treat the tariffs as if they will be here for the entire year. It’s challenging, but not insurmountable.'
(Fabricated Metal Products)

'Business is positive, new equipment sales and inquiries are strong, and the parts business is strong. Raw material costs, especially steel, appear to be leveling off. Cost of manufactured components has also leveled off. Most suppliers are willing and able to suppress cost increases. Tariff impacts are still a concern.'
(Machinery)

'Business continues to be strong. We anticipate growth in the next few months.'
(Plastics + Rubber Products)

'Business conditions are strong. Orders are up. Purchase prices are up. Unemployment is down.'
(Miscellaneous Manufacturing)

'Continued strong demand has most locations in a sold-out market, putting pressure on our facilities to produce and have strong uptime. Purchasing is under pressure to provide critical parts in a market where lead times have increased.'
(Nonmetallic Mineral Products)