Inventory building in part fueled the upturn in output, with finished goods stocks rising to the greatest degree in over a year amid worries over prices and supply constraints. This was again linked to tariffs, which served to raise input costs steeply during August and, in turn, sharply drive up typical selling prices.

The headline index from the report, the seasonally adjusted S&P Global US Manufacturing Purchasing Managers' Index (PMI), posted 53.0 in August. That was up from 49.8 in July and marked the strongest improvement in operating conditions since May 2022.

A surge in manufacturing production was signaled during August, with production rising to its steepest degree since May 2022. Growth reflected a combination of higher new orders and inventory building.

On the demand side, new work placed at US manufacturers rose for an eighth successive month, with growth improving noticeably since July, when order book gains broadly stalled. However, the increase in new work was principally domestic focused as international sales declined marginally for a second month in a row.

With output rising more quickly than new work, firms were subsequently able to build their inventories of finished goods. Indeed, on the price front, input cost inflation accelerated in August and was the second-sharpest in the past three years (surpassed only by June).

Indeed, on the price front, input cost inflation accelerated in August and was the second-sharpest in the past three years (surpassed only by June). Despite survey respondents commenting on an uncertain business outlook, especially around tariffs, overall confidence about future output improved since July.

Some positivity regarding future production, alongside a rise in present sales, led to an increase in staffing levels during August.

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