US manufacturing activity in August surged to 53.3 (above 50 = expansion), the highest since May 2022. Surging demand boosted production and a buildup of backlogs, lifting the Composite PMI (a combination of manufacturing and services) to its highest level this year. However, despite the strengthening performance, companies admitted they were struggling to meet accelerating sales.

Survey details show factory output and backlogs rose to their highest levels since mid-2022, while new orders reached their highest levels since February 2024. Responding to strong demand, manufacturers are again adding workers, at the fastest hiring rate since March 2022.

On the price side, tariffs/higher imports are intensifying cost pressures and pushing composite selling prices to a three-year high. This indicates that consumers are beginning to bear the brunt of price increases, particularly in the services sector, which recorded the highest billed prices in three years.

The services sector itself remains healthy, despite a slight decline in activity indicators; Sales actually grew the fastest this year, and backlogs remained the strongest since May 2022. Amid concerns over supply and trade policy, finished goods inventories surged to their highest level since 2007, reflecting efforts to anticipate future supply risks.

Key Points:

Manufacturing PMI 53.3 (highest since May 2022) → solid expansion.

Output, backlogs, and new orders rose; hiring accelerated the fastest since March 2022.

Selling prices hit a 3-year high due to tariff/cost pressures.

Sumber: Newsmaker.id