ISM August Manufacturing Index Drops

he Institute for Supply Management said Thursday that its manufacturing index slowed in August to 53.6 from 56.6 in July.

Economists had predicted the level would rise to 57, Bloomberg reported.

Levels above 50 indicate expansion. Manufacturing has shown expansion since May 2003. July’s level was the highest of the year.

The production index, a measure of work being performed, fell to 55.9 from 61.2, ISM said.

“While not as strong as in July, the PMI still indicates significant economic growth in both manufacturing and the overall economy,” said Norbert Ore, chairman of ISM’s manufacturing committee.

But he said there is still “great concern over recent new highs in the energy commodities. Many express concerns as to whether current business strength can be sustained if high energy prices persist.”

SM’s employment index rose to 52.6 from 53.2 July. The inventories index fell to 45.7 from 47.5, while new export orders fell to 53.3 from 55.9, ISM said.

ISM, headquartered in Tempe, Ariz., surveys more than 400 companies in 20 industries, including transportation, to compile its index.