Workers on the floor of a U.S. manufacturing facility
The U.S. manufacturing sector demonstrated continued strength in July 2026, marking its seventh consecutive month of expansion. The Institute for Supply Management’s (ISM®) Manufacturing PMI® reported a reading of 55.6 percent, a notable increase of 2.3 percentage points from June and the highest figure observed since May 2022. This sustained growth signals a broader economic expansion that has now lasted for 21 consecutive months.
Key indicators within the report underscored the positive momentum. The New Orders Index expanded for the seventh month in a row, while the Production Index saw a significant surge, reaching its highest point since November 2021. The Employment Index also entered expansion territory for the first time in 33 months, with 60 percent of surveyed panelists reporting hiring activities. Supplier Deliveries continued to lengthen, a common occurrence reflecting increased demand and capacity utilization.
While the Prices Index remained in expansionary territory, indicating upward pressure on raw material costs, its rate of increase slightly moderated compared to June. Customer inventories were reported as “too low” for the 22nd consecutive month, a factor typically supportive of future production levels. Sentiment among respondents showed a mixed picture, with 38 percent positive comments and 62 percent negative, with pricing volatility, geopolitical concerns such as the Iran war, lengthening lead times, and tariffs cited as primary challenges.
Despite these headwinds, four of the six largest manufacturing industries experienced growth in July, including Transportation Equipment, Machinery, Computer & Electronic Products, and Food, Beverage & Tobacco Products.
About the Author
