August ISM manufacturing index
Highest since 2004
Prior was 58.1
Prices paid 72.1 vs 73.2 prior
Production 63.6 vs 58.5 prior
New orders 65.1 vs 60.2 prior
Inventories 55.4 vs 53.3 prior
Employment 58.5 vs 56.5 prior
New export orders 55.2 vs 55.3 prior
Imports 53.9 vs 54.7 prior
The US dollar has been bid all day and then we get a super-strong ISM report. I don't want to be the guy who is always finding conspiracies but there's a certain odor on this one.
Aside from that, there's a big divergence between this data set and the Markit manufacturing survey, which is at the lowest since November 2017.
Taken at face value, the ISM number is incredible. Part of that is certainly shale but the economy is undoubtedly doing well.
Comments from the report:
- "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)
- "Steel tariffs and their threats are putting upward pressure on downstream materials." (Petroleum & Coal Products)
