CHICAGO The manufacturing sector logged a third consecutive month of economic growth in August, with the Institute for Supply Managements purchasing managers index (PMI) rising 0.3 percentage points to a 2013 high of 55.7.
Fifteen of 18 manufacturing industries reported growth last month, including primary metal producers and metal fabricators.
Fabricators reported growth in new orders, with one fabricator saying August brought "slight improvements" in both domestic and international sales, while primary metal producers said new orders were flat compared with July.
Prices increased last month, with the index logging a 5-point gain to 54.0, as hot-rolled and cold-rolled steel coil rose while other steel products and stainless surcharges fell.
Metal producers and fabricators both recorded production gains in August and saw their order backlogs decrease. Inventories also declined for both groups, with producers and fabricators noting customers inventories were too low.
Primary metal producers and fabricators both saw imports rise during August.
"August (new) orders tallied 63.2 while production scored a 62.4. That strength is impressive," Michael Montgomery, U.S. economist for Lexington, Mass.-based IHS Global Insight Inc., said. However, other economic indicators "fail to show the apparent strength that the PMI suggests. That is suspicious."
Additionally, with "a muddled world background it is hard to imagine that U.S. manufacturing is enjoying its best gains in over two years, especially since things looked totally stalled a scant two months ago," Montgomery said. "Taking the PMI at face value may well be a mistake."