U.S. manufacturing activity remained on a roll in July, expanding for the seventh consecutive month, according to the Institute for Supply Management.

The organization’s Manufacturing PMI registered 55.6% in July, which is its highest reading since May 2022, when it recorded 55.9%. The data were released Aug. 3.

A reading above 50% indicates activity is expanding; below 50% indicates contraction.

Among the subindexes that comprise the PMI, the employment index reading of 52.8% put this subindex in expansion territory for the first time in 33 months, according to Susan Spence, who chairs the ISM’s Manufacturing Business Survey Committee. Sixty percent of the survey panelists reported that their companies are hiring.

Overall, four of the five subindexes that make up the PMI expanded compared to the previous month, while the inventories subindex declined just slightly, the ISM Manufacturing PMI Report indicated.

Still, the report’s output wasn’t entirely rosy.

"Looking at the manufacturing economy, 20% of the sector's gross domestic product (GDP) contracted in July, compared to 5% in June; however, no share of manufacturing GDP was in strong contraction (defined as a composite PMI of 45% or lower), compared to 3% in June. The share of sector GDP with a PMI at or below 45% is a good metric to gauge overall manufacturing weakness,” noted Spence.

Negative comments from the survey panelists focused on pricing volatility, cited in 57% of those comments, followed by the Iran conflict (43%), lead times (22%) and tariffs (18%).

Examples of both positive and negative comments outlined in the ISM report include:

“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

“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