The Piton Investment Team has previously spotlighted their research into the resurgence of manufacturing in the U.S. (May 15, 2026). One of the metrics that they watch is the Purchasing Managers Index (PMI), so this week they thought it would be a good time to look at recent data about manufacturing in this index in the context of longer history.
First, a brief explanation of the methodology, to help understand where the PMI fits in with other economic data. S&P Global describes their PMI’s this way: “PMI is a survey-based indicator…. It covers two main areas: manufacturing and services, measuring whether companies are seeing growth or contraction in key areas like output, new orders, employment, supplier delivery times, inventories, and prices. Here’s how it’s calculated: Each month, purchasing managers report whether these variables are higher, lower, or unchanged compared to the previous month. The PMI formula is…: PMI = (% Higher) + 0.5 × (% Unchanged). This produces a score between 0 and 100, where:
- 50 = no change (the economy is holding steady)
- Above 50 = expansion (business conditions are improving)
- Below 50 = contraction (business conditions are weakening)”
(https://www.spglobal.com/market-intelligence/en/solutions/products/pmi).
There is also a similar monthly PMI conducted by the Institute for Supply Management (ISM). The ISM score gives equal weight to five categories: new orders, production, employment, supplier deliveries, and inventories. The chart below shows both the S&P and the ISM PMI’s for manufacturing, alongside aggregations of manufacturing surveys by five regional Federal Reserve manufacturing surveys (New York, Philadelphia, Richmond, Kansas City, and Dallas), using the same five categories and weights as the ISM report. The chart covers June 2004 to June 2026.
As the Investment Committee sees it, the shape of the four tracking mechanisms is broadly similar. They each also show an analogous positive trajectory in recent years, which supports the Committee’s stance, based also on other data, that U.S. manufacturing has grown and, if trends continue, will continue to grow. Within this larger trend, then, the Committee dives into specific companies that are poised to be successful in this environment and then assess holdings for Piton Portfolios. When clients recognize portfolio positions in the manufacturing sector, the growth indicators of PMI’s is one reason. When such trends shift, or course, the Investment Team will be sure to stay up to date and make fresh analyses to pursue the best opportunities for Piton clients!