Monthly · ISM via FRED
The ISM Manufacturing PMI is the closest thing to a real-time reading of factory America - it surveys purchasing managers at over 300 manufacturers who are among the first to know when orders are rising or falling. Their answers on new orders, production, and hiring roll up into a single number that has been one of the most reliable leading economic indicators for 70 years. Published the first business day of each month by the Institute for Supply Management.
Above 50 means the manufacturing sector is expanding - more respondents reported improvement than deterioration. Below 50 means contraction. Above 55 is strong. Above 60 is hot and can signal capacity constraints. Below 45 is meaningful contraction. The new orders sub-component is the most forward-looking - it typically leads the headline by 1-3 months. Manufacturing is only about 11% of GDP but historically it moves first in the business cycle, making this index a reliable early warning system for the broader economy.
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Analysis updated: Aug 25, 2026
A PMI reading of 55.6 signals robust expansion in the manufacturing sector, with any reading above 50 indicating growth and levels above 55 historically associated with broad-based industrial momentum. As a leading indicator with a 3–6 month forward horizon, this print suggests sustained GDP contribution from goods production into late 2026 and early 2027. Strong new orders and production components at this level typically foreshadow rising capital expenditure and improved labor demand across supply chains.
Despite the elevated headline, a stable trend rather than an accelerating one may indicate that manufacturing expansion is plateauing, raising the risk that the cycle is maturing without a fresh demand catalyst. If underlying components such as new export orders or supplier deliveries are softening, the aggregate reading could be masking emerging fragility in global trade or inventory overhang. Persistent input price pressures at this stage of the cycle could compress margins and dampen forward investment intentions even as headline activity remains positive.
At 55.6, the ISM Manufacturing PMI sits comfortably in expansionary territory and is consistent with annualized industrial output growth of approximately 3–4%, in line with a mid-cycle expansion phase. This reading should be cross-referenced with the ISM Services PMI, core durable goods orders, and regional Fed manufacturing surveys to confirm breadth of the expansion. The critical threshold to monitor is a sustained move below 50, which would signal contraction and, given the indicator's leading properties, raise recession risk flags for the first half of 2027.
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