US ISM PMI remained at 1 year low in August 2022.

 

The prices subindex had eased to 52.5 (-7.5) because of an easing in supply and logistic disruption (Please see the chart below).

Simultaneously, the supplier deliveries also eased to 55.1 (-0.1) because of the easing in logistics.

The new order increased to 51.3 (+3.3) due to a significant increase in the local new order (+6.5).  However, the new export order had entered a contractionary phase (49.4, -3.2).  Nevertheless, the new order had depleted some customers’ inventories (38.9, -0.6).

The backlog of orders increased to 53 (+1.7) because the production (50.4, -3.1) and fallen and couldn’t keep up with the increase in the new order.  Production fell because the producers cut back on their inventories and raw materials.  The inventories fell to 53.1(-4.1), the import dropped to 52.5(-1.9) and the local raw material declined by an estimated 2.3.  However, the producers increased their employment to 54.2(+4.3) in anticipation of a further increase in production to achieve economies of scale.

In conclusion, the above factors caused the PMI to decline to a 1 year low of 52.8 and would continue its downward trajectory.