U.S. Manufacturing Growth Slows in August 2026 Amid Supply Chain and Pricing Pressures
Event summary
- The ISM Manufacturing PMI® fell to 54.6 in August 2026, down 1 point from July, marking the eighth consecutive month of expansion but at a slower pace.
- New Orders and Backlog of Orders indexes declined, while Supplier Deliveries slowed for the ninth straight month, indicating ongoing supply chain disruptions.
- Prices Index remained elevated at 71.1, with 57% of negative comments citing pricing volatility due to factors like the Iran war and tariffs.
- 15 of 18 manufacturing industries reported growth, with Transportation Equipment and Computer & Electronic Products among the leaders.
The big picture
U.S. manufacturing continues to expand but faces mounting challenges from supply chain bottlenecks, geopolitical tensions, and pricing pressures. The sector's resilience is being tested by persistent inflation in raw materials and uncertainties around trade policies. The slowdown in key demand indicators suggests potential headwinds for future growth, particularly if global conflicts escalate or tariffs remain volatile.
What we're watching
- Supply Chain Dynamics
- How the continuing slowdown in supplier deliveries will impact production timelines and inventory management.
- Pricing Volatility
- Whether manufacturers can sustain profitability amid rising costs for steel, aluminum, and other key commodities.
- Geopolitical Risks
- The extent to which the Iran conflict and shifting tariff policies will disrupt global supply chains and manufacturing output.