\n By Jeffry Bartash <\/p>\n
\n Supply shortages are the worst since the pandemic, ISM finds <\/p>\n
\n Manufacturers who produce products tied to artificial intelligence have been very busy. <\/p>\n
\n Check back for updates <\/p>\n
\n American manufacturers grew in July at the fastest pace in more than four year as they bore the fruits of a massive boom in artificial intelligence, but they’re also being hampered by pandemic-era-like supply shortages and higher inflation. <\/p>\n
\n A closely followed ISM gauge of manufacturers rose to 55.6% in July from 53.3% in the prior month. Any number above 50% indicates business is growing. <\/p>\n
\n “Business is still solid,” a senior executive at a manufacturer of metal parts told the Institute for Supply Management. “W e will increase revenue by 3% to 5%.” <\/p>\n
\n The problem is, getting enough critical supplies, such as metals, fertilizer and computer chips, and getting them on time. A lack of supplies have pushed prices higher and added to U.S. inflationary pressures. <\/p>\n
\n “The pricing volatility and lead-time extensions in this market are arguably worse than the pandemic era,” an executive at a maker of electrical equipment said. <\/p>\n
\n The ISM surveys executives every month about how their businesses are doing. Manufacturers employ about 13 million people and still play a vital role in the U.S. economy. <\/p>\n
\n Big picture: It’s good times, bad times for American manufacturers. <\/p>\n
\n They are benefiting from a frenzy of spending on artificial intelligence, but the conflict with Iran and new Trump tariffs are acting as drags on growth. <\/p>\n
\n The result: Manufacturers are also being very cautious, especially when it comes hiring new workers. <\/p>\n
\n Market reaction: The Dow Jones Industrial Average DJIA and S&P 500 SPX rose sharply in Monday trading and moved closer to all-time highs. <\/p>\n
\n -Jeffry Bartash <\/p>\n
\n This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal. <\/p>\n
\n (END) Dow Jones Newswires<\/p>\n
\n 08-03-26 1021ET<\/p>\n
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