U.S. manufacturers signalled increased output for the third month running in August. Furthermore, the rate of expansion remained solid overall, having edged up slightly from July to a nine-month high. Anecdotal evidence suggested that new product launches, stronger underlying demand and new marketing strategies had supported production growth in August.
Although solid growth of output was sustained, total new orders expanded at a slower rate in August. Data indicated that relatively subdued domestic demand was a reason behind softer growth in overall new work, as export sales increased at the fastest pace in 23 months. While some companies commented that a number of clients had adopted a wait-and-a-see approach until the outcome of the presidential election, others mentioned that total new work had been boosted by new foreign client wins over the latest survey period.
Manufacturing employment increased only slightly during August. Furthermore, it was the weakest rate of payroll growth seen for four months. Greater staff numbers were generally linked to higher amounts of new work. At the same time, other firms mentioned that efforts to raise efficiency had weighed on overall jobs growth. August survey data pointed to a further rise in purchasing activity, which was generally attributed to greater amounts of incoming new work. In line with the trend for new orders, however, the rate of expansion slowed since July. Meanwhile, stocks of finished goods and purchased items both fell as companies generally adopted cautious inventory policies.
Average cost burdens faced by U.S. manufacturers rose only slightly during August. Furthermore, the rate of input price inflation was the slowest seen in the current five-month sequence of increasing costs.
Prices charged for U.S. manufactured goods were unchanged in August, thereby ending a three-month sequence of increase. According to anecdotal evidence, greater competition for new work had weighed on the overall pricing power of firms in the latest survey period.