U.S. manufacturing expanded in August at the fastest pace in more than three years, lifting overall business activity to its strongest level of 2025, according to S&P Global’s flash purchasing managers indexes.
The manufacturing PMI jumped to 53.3 from 49.8 in July, the highest reading since May 2022. Output and new orders both strengthened, pushing backlogs to mid-2022 levels and spurring the sharpest increase in factory hiring in more than two years.
The broader composite output index, which includes services, edged up to 55.4 from 55.1, marking the eighth consecutive month of expansion and signaling momentum in the private sector. S&P Global said the data are consistent with gross domestic product advancing at about a two and a half percent annual rate in the third quarter, a step up from the first half.
Service-sector growth remained solid, with new business expanding at the fastest pace this year. Employers across both manufacturing and services reported stronger demand and continued to add staff to keep up with orders.
Inflation pressures also firmed. Companies cited higher input costs tied to tariffs and passed on increases to customers more broadly. The survey’s gauge of selling prices rose to its highest in three years, led by service providers.
Factories, meanwhile, built up inventories, with finished-goods stockpiles hitting the highest level since the series began in 2007. Some firms pointed to trade-policy uncertainty and supply-chain concerns as reasons for precautionary stockpiling.
S&P Global will release final August readings early next month.
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