PMI Reaches Highest Point Since 2022
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PMI Reaches Highest Point Since 2022 | Manufacturing News Desk | advancedmanufacturing.org
Type: News Repost
The manufacturing sector has expanded for the seventh consecutive month, according to the July 2026 Institute for Supply Management (ISM) Manufacturing PMI Report.
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The Manufacturing PMI for July 2026 reached its highest reading in more than four years. While several indexes showed continued growth, some industry experts are concerned about pricing volatility and extended lead times.
The manufacturing sector has expanded for the seventh consecutive month, according to the July 2026 Institute for Supply Management (ISM) Manufacturing PMI Report.
“We have a really strong report this month,” said Susan Spence, chair of the ISM Manufacturing Business Survey Committee, during a briefing Monday morning.
The Manufacturing PMI reached 55.6% in July, a 2.3% increase from June’s figure, and the highest reading since May 2022, when it registered at 55.9%. The overall economy continued to expand for the 21st month in a row.
Three of the four demand indicators—New Orders, Backlog of Orders and New Export Orders—were in expansion, coming in at 56.7%, 55%, and 53%, respectively. Customers’ Inventories, the fourth demand indicator, remained in the “too low” territory, registering at 40.7%. This is down from 42.3% in June. ISM states that a “too low” status of this index is considered positive for future production.
Regarding production, that index also reached new heights, coming in at 58.5% for July. This was 6.3 percentage points higher than June’s 52.2%, and the highest reading since November 2021 (60.5%).
Employment rose 3.1 percentage points month over month, from 49.7% to 52.8%. This index entered the growth territory for the first time in 33 months.
“So overall, we're in the seventh month of an expansion trend with positive momentum, keeping that expansion growing,” Spence said. “Provided prices continue to stabilize and new orders continue to flow, that is keeping us optimistic.”
Fifteen manufacturing industries reported growth in July, including Printed and related support activities Apparel Leather and allied products Electrical equipment Appliances and components Primary metals Nonmetallic mineral products Transportation equipment Miscellaneous manufacturing Textile mills Machinery Computer and electronic products Food, beverage and tobacco products Wood products Plastic and rubber products Furniture and related products Fabricated metal products
Chemicals products was the only industry in contraction for July.
While the Prices Index (71.1%) decreased 1.9 percentage points between June and July, the figure still indicated that raw materials prices increased, and did so for the 22nd straight month, according to the report. ISM states a Prices Index reading above 52.8% over time is in line with an increase in the Bureau of Labor Statistics Producer Price Index for Intermediate Materials. Fourteen industries reported paying increased prices for raw materials; this included five of the six largest manufacturing industries (computer and electronic products; machinery; transportation equipment; chemical products; and food, beverage and tobacco products).
“Regarding sentiment, this month, 62% of our panelists had negative comments in headline sentiment, to 38% that were positive,” Spence said during the briefing. “If you look at the 62% of negative, 18% of them mentioned tariffs, 43% mentioned the Iran war, 57% cited pricing volatility, and I included a new (figure) this month because I saw it pretty often: 22% of those negative comments cited extended lead times as stressors on the supply chain and cost structures.”
One survey respondent from the electrical equipment, appliances and components industry suggested the pricing volatility and lead-time extensions in their market were worse than during the pandemic. “During COVID-19, we saw a surge of price hikes and inventory buy-ups, which caused constraints that eventually leveled out,” the respondent said in the ISM press release. “We are seeing nothing but consistent upward trends for both pricing and lead times that show no signs of slowing down.”
Tariffs were also discussed during the briefing. Last week, the Trump administration imposed tariffs ranging from 10% to 12.5% on 60 of America’s trading partners, to fight forced labor. Spence says the ISM will monitor how the tariffs will impact the industry.
“Certainly 10 (percent) is more palatable than 30 or 40 (percent), but we do have risk factors that we remain concerned about,” Spence said during the briefing. “But overall, definitely with every month, and especially with employment breaching that 50 percentage point mark, we’re definitely optimistic.”
Source
- advancedmanufacturing.org (2026-08-03) - Original article: [PMI Reaches Highest Point Since 2022 | Manufacturing News Desk | advancedmanufacturing.org](https://advancedmanufacturing.org/news-desk/pmi-reaches-highest-point-since-2022/article_e800cffa-1d15-43a8-8aae-d0f5ffc8af86.html)