GLOBAL ECONOMY
US Manufacturing PMI at 54.6: Why Costs Refuse to Fall Despite Slowing New Orders
The US manufacturing PMI for August stood at 54.6, remaining above the threshold of 50 to continue its expansion phase, though down from July. The new orders index fell to 53.7, indicating that while demand is still growing, the pace of growth is slowing. The prices paid index stayed high at 71.1, matching July's level and showing that manufacturers' cost pressures are not easily easing. Tariffs, energy prices, electronic component supply issues, and labor costs are acting simultaneously, creating a pattern of slowing orders coupled with rising costs. Korean companies need to examine changes in US orders, tariff structures, inventory replenishment demand, and local cost shifts on a category-by-category basis.
US Manufacturing PMI at 54.6: Why Costs Refuse to Fall Despite Slowing New Orders American manufacturing continues to expand, but a closer look reveals signals slightly different from before. The Institute for Supply Management (ISM) reported on September 1 that the manufacturing Purchasing Managers' Index (PMI) for August registered 54.6. While still above the threshold of 50 that separates economic expansion from contraction, it was lower than July and missed the market consensus compiled by Reuters. What matters in this indicator is not just the headline figure of 54.6. When breaking down the sub-indexes that show the actual currents of manufacturing, the growth in new orders noticeably weakened, whereas the input prices borne by companies remained at elevated levels. The employment index also barely scraped past 50. In short, the growth rate of demand has moderated while cost burdens…
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