August’s manufacturing PMI dips to 54.6; supply chain constraints persist

U. S. manufacturing activity remained supportive of freight demand for an eighth straight month in August, but by a lesser degree than in July. Growth cooled for some key components like new orders, but the slowdown could be tied to companies pulling forward inventories ahead of tariff implementations earlier this summer.

A ‌survey of manufacturing supply executives returned a 54. 6 reading for the recent month, which was 1 percentage point below July (the highest level recorded since May 2022). Economists were calling for a 55. 2 reading in August.

A reading above 50 for the Institute for Supply Management’s Manufacturing PMI signals expansion, while one below 50 indicates contraction. A sustained level above 47. 5 signals the overall economy is growing. The August reading was consistent with annualized real GDP growth of 2. 4%, the Tuesday report said.

The new orders index—an indicator of future activity—also expanded for an eighth consecutive month. However, the 53. 7 level captured in August was 3 points below July. The backlog of orders dataset (51. 8) remained positive, but came in 3. 2 points lower sequentially as production (58. 3) remained elevated.

Demand sentiment around news orders was less optimistic with a 2-to-1 ratio of positive-to-negative comments compared to 3. 5-to-1 in July. Customers’ inventories (42. 8) remained “too low,” but the index was up 2. 1 points sequentially. Manufacturing employment (51. 2) turned positive in July for the first time in 33 months and remained so in August.

Transportation capacity remained tight in August, according to the Logistics Managers’ Index, which was also published Tuesday. The data showed a 40 reading for the month, which remained deep into contraction territory, but at a contraction rate that was 11. 6 points slower than in July. SONAR: Outbound Tender Rejection Index (OTRI.

USA) for 2026 (blue shaded area), 2025 (yellow line), 2024 (green line) and 2023 (pink line). A proxy for truck capacity, the tender rejection index shows the number of loads being rejected by carriers. Current tender rejections show a tight truckload market. To learn more about SONAR, click here.

The ISM’s supplier deliveries dataset, which measures delivery times to manufacturing facilities, showed a slowing in deliveries and potential supply chain constraints for a ninth straight month. The 59. 3 reading was up 40 basis points sequentially. (This ISM subindex is the only one that is inverted.)

Of the 14 manufacturing industries tracked, “no industries reported that supplier deliveries were faster in August compared to July.” SONAR Tender Lead Time (STLT. USA) for 2026 (blue shaded area) and 2025 (yellow line). The index measures how far in advance a tender is submitted before a load’s scheduled pickup.

Inflation was flagged as a key concern among respondents, with the prices index (71. 1) remaining elevated, but level with July. The latest reading implies “raw materials prices increased for the 23rd straight month.” Respondents reporting higher prices fell 4 points to 46. 2%. Overall, respondent sentiment was 42% positive and 58% negative for the month.

Pricing volatility was the biggest concern cited in the negative comments. Public less-than-truckload carriers will report August tonnage trends in the coming days. The industrial economy typically accounts for roughly two-thirds of LTL revenue. Why it matters?

The ISM dataset provides key macroeconomic indicators that directly impact logistics, procurement and capacity planning.

More FreightWaves articles by Todd Maiden: Transportation capacity contraction slows in August Averitt expands logistics network with Jackson, Mississippi, facility Broker RXO sees TL spot rate surge extend into Q3 The post August’s manufacturing PMI dips to 54. 6; supply chain constraints persist appeared first on FreightWaves.