Manufacturing Index Jumps

American manufacturers are on a roll.The Institute for Supply Management said its manufacturing index jumped to a 14-year high of 61.3 percent last month from 58.1 percent in July.

Readings over 50 percent indicate more companies are expanding.

Some 16 of the 18 industries tracked by ISM reported expanding in August.

The ISM index is compiled from a survey of executives who order raw materials and other supplies for their companies. The gauge tends to rise or fall in tandem with the health of the economy.

The findings suggest explosive growth in the U.S. economy in the spring and a promising start to the current quarter.

The economy is firing on almost all cylinders—with exceptions such as agriculture and the farm equipment industry. The persistent threat of a broader trade war continues to drag down recent gains.

Among the few industries to contract in August was “primary metals,” a grouping that includes steel and aluminum producers. U.S. tariffs and retaliatory foreign measures have made it harder to obtain key metals at stable prices.

Prices for raw materials are also on the higher side, though inflationary pressures have eased a bit lately, executives said.

A senior executive at a maker of fabricated-metal products said “the toughest thing we deal with is the unknown. Dealing with tariffs on steel purchases and not knowing if or when they will end makes planning difficult.”

Sources: Bloomberg, MarketWatch