U.S. manufacturing in August 2025 showed clear signs of renewed momentum, with certain indicators reaching multi-year highs even as underlying challenges persisted. The sector’s performance painted a mixed picture: one major index signaled the strongest expansion in over three years, while another continued to indicate a mild contraction. Overall, factory output and orders rebounded modestly, reflecting an industry that may be turning the corner toward growth. At the same time, manufacturers faced significant headwinds from rising costs and policy uncertainty, tempering the optimism.
Notably, revived import tariffs—introduced earlier in the year by the administration—have added uncertainty and cost pressure across supply chains. Survey data reveals mounting concerns over tariffs and inflation, as rising input prices and some lengthening in supplier delivery times hint at nascent supply chain stress. Yet corporate America continues to bet on domestic manufacturing: August saw a slew of high-profile factory investment announcements, signaling long-term confidence in the sector’s future despite the near-term challenges.
A Month in Data
Both major purchasing manager indices provided insight into manufacturing’s trajectory in August, and together they suggest improvement albeit with divergent signals. The S&P Global US Manufacturing PMI jumped to 53.0 in August, up sharply from 49.8 in July, marking the strongest operating conditions since May 2022. This reading above the neutral 50 threshold indicates a return to expansion, driven by a surge in production and solid growth in new orders, according to S&P Global analysts. In contrast, the ISM Manufacturing PMI® registered 48.7% in August, up slightly from 48.0% in July. ISM’s figure remained below 50, signaling that economic activity in the manufacturing sector contracted for the sixth consecutive month, though at a slower rate than in July.
Notably, demand showed signs of life. ISM’s New Orders Index flipped back into growth at 51.4 in August – its first expansion after six months of declines – compared to 47.1 in July. This suggests U.S. factories saw an uptick in new demand late in the summer. However, production has yet to fully catch up; ISM’s Production Index fell to 47.8 (from 51.4 in July), indicating output contracted even as new orders rose.
Employment conditions were mixed: ISM’s Employment Index remained in contraction at 43.8 (slightly up from 43.4) as manufacturers continued managing headcounts cautiously, whereas S&P reported that firms stepped up hiring in August amid capacity constraints and backlogs. Meanwhile, price pressures remain intense. ISM’s Prices Index stayed elevated at 63.7%, signaling that input costs are still rising rapidly (only a tad lower than July’s 64.8%). S&P Global similarly noted a steep jump in input prices in August, linked overwhelmingly by purchasing managers to new tariffs, which in turn led to sharply higher factory selling prices.
What the Data Means
The divergence between the two PMI surveys underscores an uneven but improving landscape for U.S. manufacturing. S&P’s data implies a manufacturing rebound gaining steam, whereas ISM’s index – which tends to weigh larger, domestic-oriented firms – shows many factories still under strain, though conditions have modestly improved. This gap partly reflects differences in survey methodology, but the overarching message is that momentum is returning, albeit not uniformly across the sector. Encouragingly, new demand is picking up: both surveys reported rising orders, and ISM’s move back above 50 for new orders is a positive sign that the worst of the demand downturn may be passing. In fact, the breadth of the contraction has narrowed considerably.
Only 69% of manufacturing GDP was contracting in August, down from 79% in July, and a mere 4% of sector GDP was experiencing “strong” contraction (composite PMI at or below 45) versus 31% in July. Additionally, a few key industries even returned to growth – two of the six largest manufacturing sectors (Food & Beverage and Petroleum products) expanded in August after none did in July – suggesting that certain segments are stabilizing or rebounding even as others continue to lag.
U.S. manufacturing is showing signs of life after a prolonged slump. Production, new orders, and even hiring (in pockets) are rebounding, and the overall contraction in the sector is slowing. The data suggests that the worst may be over in terms of decline. Yet the recovery remains fragile and complex. Much of the current growth appears to be built on firms maneuvering around tariff impacts and timing issues (stockpiling ahead of future challenges) rather than on a surge of organic end-market demand.
Persistent cost inflation and policy uncertainty are clouding the outlook, forcing manufacturers to stay nimble. Going forward, a key question will be whether this nascent expansion can sustain itself once the one-off boosts (like inventory builds) fade – especially if tariffs and elevated prices continue to act as a brake on real demand. The coming months will test the industry’s resilience, but for now, August’s numbers offer hope that a corner has been turned, even if cautiously so.
New Factory and Manufacturing Announcements
August 2025 continued the trend of robust industrial investment across the United States, signaling confidence in the sector’s future. This month saw new manufacturing projects launched across a wide range of industries – from cutting-edge biotech and pharmaceuticals facilities to large-scale energy and materials plants, as well as expansions in consumer goods and aerospace production.
Genentech’s $700 Million Biotech Facility (North Carolina)
Global biotech firm Genentech (part of Roche Group) broke ground on a major new pharmaceutical manufacturing site in Holly Springs, North Carolina. The 700,000 sq. ft. facility, valued at $700 million, will produce next-generation biologic medicines and therapies. It is expected to create over 400 high-skill manufacturing jobs once operational, plus about 1,500 construction jobs during the build-out.
Cronus Chemicals’ $2 Billion Fertilizer Plant (Illinois)
In the heavy industrial sector, Cronus Chemicals LLC announced plans for a $2 billion state-of-the-art fertilizer plant in Tuscola, Illinois. The project will construct a new ammonia production facility capable of churning out 950,000 tons of nitrogen fertilizer annually to supply Midwestern agriculture. Supported by Illinois’ EDGE economic incentive program, the plant will create about 130 full-time manufacturing jobs and strengthen the domestic supply of critical agricultural inputs.
GE Appliances’ $3 Billion U.S. Expansion Plan
One of the largest manufacturing investments of the month came from GE Appliances (a Haier company), which unveiled a $3 billion plan to expand its U.S. manufacturing footprint over the next five years. This ambitious initiative spans five states – Kentucky, Alabama, Georgia, Tennessee, and South Carolina – and will create about 1,000 new jobs across those locations. The plan includes building a new appliance manufacturing facility in Camden, South Carolina and major expansions or upgrades at existing plants in Selmer, TN; LaFayette, GA; Decatur, AL; and the company’s flagship Appliance Park in Louisville, KY.
JBS’s $100 Million Bacon Plant (Iowa)
The food processing industry saw a major development as JBS USA – one of the world’s largest meatpacking companies – announced a $100 million investment to establish a new prepared meats plant in Ankeny, Iowa. JBS is acquiring and converting a 186,000 sq. ft. facility into what will become its largest ready-to-eat bacon and sausage production plant in the United States. The project is expected to create 400 jobs in central Iowa when fully operational.
Future Outlook
August 2025 may be remembered as a pivotal turning point for U.S. manufacturing: a month where the data showed early hints of growth after an extended slump, yet also one that illuminated the new hurdles the industry must navigate. The coming months will be telling. If manufacturers can absorb the tariff shock, stabilize their cost structures, and convert the recent uptick in orders into sustained production, the sector will build confidence that a real recovery is taking hold.
The fact that firms are investing heavily in new capacity – as seen in the flurry of factory announcements – indicates an expectation that demand will be there in the future. By late 2025, as some of these new factories begin to come online and if broader economic conditions (inflation, interest rates, and global growth) become more favorable, the outlook could brighten considerably. Industry experts suggest planning for a “bumpy” short-term ride but keeping focus on the long game.
In practical terms, manufacturers should brace for continued volatility in the near term. Inventory-driven boosts may fade, and trade policy uncertainty could persist into 2026, potentially causing periodic slowdowns. However, the underlying trends – a restructured supply chain with more U.S.-based production, technological upgrades at plants, and steady government support for critical industries – provide a strong foundation for longer-term growth.
