U.S. manufacturing expanded in July at its fastest pace in over four years, with the Manufacturing PMI at 55.6 percent a

U.S. manufacturing expanded in July for the seventh consecutive month, according to the Institute for Supply Management's Manufacturing PMI Report released August 3, 2026. The Manufacturing PMI registered 55.6 percent in July, 2.3 percentage points above June and the highest reading since May 2022. The overall economy continued in expansion for the 21st month in a row.

Susan Spence, Chair of ISM's Manufacturing Business Survey Committee, noted that new orders expanded for the seventh consecutive month after a four-month contraction period, reaching 56.7 percent. The Production Index hit 58.5 percent, up 6.3 percentage points from June and the highest since November 2021. Most significantly, the Employment Index rose to 52.8 percent, up 3.1 percentage points from June's 49.7 percent, marking the first time in 33 months that employment entered expansion territory. Sixty percent of panelists reported their companies are hiring.

The Prices Index remained elevated at 71.1 percent, down 1.9 percentage points from June, showing continued relief after three straight month-over-month decreases. The Supplier Deliveries Index registered 58.9 percent, indicating slowing deliveries for the eighth consecutive month, which is typical as customer demand increases. Customers' inventories remained too low at 40.7 percent, considered positive for future production.

Among concerns cited by respondents, 38 percent offered positive comments while 62 percent were negative, with a ratio of 1 to 1.6. Key worries included pricing volatility in 57 percent of negative comments, the Iran war in 43 percent, increasing lead times in 22 percent, and tariffs in 18 percent. Fifteen of sixteen major manufacturing industries expanded in July, with only Chemical Products contracting. Of the six largest industries, four expanded: Transportation Equipment, Machinery, Computer & Electronic Products, and Food, Beverage & Tobacco Products.

Commodity prices remained volatile, with significant increases in aluminum, copper, steel, semiconductors, and integrated circuits, while shortages persisted in aluminum, copper, electrical and electronic components, semiconductors, and steel.