ISM Manufacturing Rebound Continues. Price Index Is 71.1 Percent.

Employment expands for the first time in 34 months. Export orders Expand.

ISM table and related comments by permission of the Institute for Supply Management (ISM)

Please consider the July 2026 ISM® Manufacturing PMI® Report

The report was issued today by Susan Spence, MBA, Chair of the Institute for Supply Management® (ISM®) Manufacturing Business Survey Committee.
“The Manufacturing PMI® registered 55.6 percent in July, 2.3 percentage points above the June figure and the highest reading since May 2022 (55.9 percent). The overall economy continued in expansion for the 21st month in a row. (A Manufacturing PMI® above 47.5 percent, over a period of time, generally indicates an expansion of the overall economy.) The New Orders Index expanded for the seventh consecutive month after four straight readings in contraction, registering 56.7 percent, up 0.7 percentage point compared to June’s figure of 56 percent. The July reading of the Production Index (58.5 percent) is 6.3 percentage points higher than the 52.2 percent recorded in June and the highest figure since November 2021 (60.5 percent). The Prices Index remained in expansion (or ‘increasing’ territory), registering 71.1 percent, a 1.9-percentage point decrease from June’s reading of 73 percent. The Backlog of Orders Index registered 55 percent, up 4.5 percentage points compared to the 50.5 percent recorded in June. The Employment Index reading of 52.8 percent is up 3.1 percentage points from June’s figure of 49.7 percent, putting the index in expansion territory for the first time in 33 months,” says Spence.

Key ISM Points

New Orders Growing
Production Growing
Employment Growing, a Change from Contracting
Prices Increasing
Imports Growing
Exports Growing, a Change from Contracting

Respondent Comments (Emphasis Mine)

“We are seeing a very opportunistic and reactive marketplace. If shortage items become available, we opportunistically buy. Some customers are reducing inventory; others are pulling forward demand. As many customers that are slowing down, an equal number are growing. It looks like a lot of shuffling and shifting market share.” [Chemical Products]
“We continue to operate in a favorable demand environment driven by growth in the semiconductor, AI, advanced packaging, and high-performance computing markets. Recent company reports indicate strong sales growth and continued investment in manufacturing capacity, technology and customer-support capabilities. This scenario supports a positive business outlook and creates opportunities to leverage increased purchasing scale across the enterprise.” [Computer & Electronic Products]
“Now that it seems the buildout of AI infrastructure globally is nearing real activation, products going into data centers are at full procurement and manufacturing ramp-up. Thus, demand for our semiconductor end products and connectivity (power, networking and photonics) is booming. Similarly, defense is at an all-time high, with most of our product orders going to these two industries. Order volumes for medical, industrial and consumer products are markedly lower.” [Machinery]
“Aerospace and defense demand continues to be strong and growing, based on business backlogs. Competing for scare supply — electronics, certain critical minerals and other categories — is challenging on-time fulfillment for our supply chains. This is expected to get worse with co-dependent sectors also remaining strong and restocking challenges for automotive electronics.” [Transportation Equipment]
“Continued tariffs on products utilized in our product lines are being monitored by the business, which is working to mitigate or limit tariff risk. Geopolitical risk, especially in the Middle East, pertaining to commodity and energy markets remains a concern. There has been some increased cost and transit time for rerouted shipments due to conflicts in the Red Sea, Strait of Hormuz and Suez Canal.” [Transportation Equipment]
“Business is still solid; we will increase revenue by 3 percent to 5 percent. We are considering foreign steel purchases for early next year because domestic steel mills are getting greedy.” [Fabricated Metal Products]
“No normalcy in sight in the world of metals. It makes me yearn for the coronavirus pandemic chaos, which was more manageable than whatever this is that we are in. At least business is better; however, the components of good business are not. Sharp pricing downturns in aluminum will make things more interesting, as supply levels will prevent those decreases from taking hold across the board. Getting customers to understand that is not always easy.” [Primary Metals]
“The pricing volatility and lead-time extensions in this market are arguably worse than the pandemic era. During COVID-19, we saw a surge of price hikes and inventory buy-ups, which caused constraints that eventually leveled out. We are seeing nothing but consistent upward trends for both pricing and lead times that show no signs of slowing down. Specifically, 5-percent to 25-percent price increases for printed circuit board assembly components and 15-percent to 45-percent increases for bare boards are negatively impacting customer demand outlook into next year. This isn’t sustainable.” [Electrical Equipment, Appliances & Components]
“Our customers in Asia continue to procure elsewhere to avoid paying a tariff. While the Iran war was paused, it was terrific to see fuel prices (and delivery costs) falling steadily. Now that skirmishes have resumed, we expect fuel to rise again.” [Paper Products]
“Definitely a downturn within several of our business units, mainly the consumer products division. High freight costs, both for truck and ocean, and longer lead times are concerning. Pricing was moving downward until the Iran war started again.” [Chemical Products]

That’s a mixed bag of comments. AI is booming but price pressures mounting on metals and oil.

Two customers reported chaos is worse than the Covid pandemic.

Commodities Up/Down in Price or in Short Supply

The numbers in parenthesis below are the number of months.

Commodities Up in Price

Acrylonitrile Butadiene Styrene (ABS); Aluminum* (32); Copper (13); Corn; Corrugated Products (4); Electrical Components (2); Electronic Components (7); Freight (5); Fuel* (5); Integrated Circuits; Memory Components (5); Metal Products (4); Ocean Freight (3); Oil Based Products (4); Paper Products (4); Plastic Based Products (4); Plastics (5); Printed Circuit Boards; Resin Based Products; Resins (6); Semiconductors (2); Soybean Meal; Steel (9); Steel — Cold Rolled; Steel — Hot Rolled (7); Steel — Stainless (6); Steel Products (8); and Sulfur Products (4).

Commodities Down in Price

Aluminum(2); Fuel (2); and Polypropylene Resin (2).

Commodities in Short Supply

Aluminum; Copper; Electrical Components (13); Electronic Components (17); Integrated Circuits; Memory (7); Oil Based Products; Printed Circuit Boards; Rare Earth Components; Semiconductors (5); Steel; Steel — Hot Rolled (2); and Tungsten Products.

Aluminum has been up 32 straight months, copper 13, steel 7-9 depending on type. Manufacturers will pass these prices on.

Electrical components and electronic components have been in short supply for 13 and 17 months respectively. This adds to price pressures.

ISM Reported Input Prices