US Manufacturing Hits Four-Year High Amid AI Spending Surge
US manufacturing growth reached its strongest level since May 2022 in September, driven by AI investments and strong domestic demand for electronics and machinery.
U.S. manufacturing expanded for the ninth consecutive month in September, reaching its strongest growth level since May 2022. Data from S&P Global and the Institute for Supply Management show the S&P Global manufacturing PMI hit 55.9, a four-year high, while the ISM index registered 54.5%.
Donald Trump announced plans for a $15 billion steel plant in Iowa, with the White House attributing the industrial revival to current administration policies. The broader surge in production is driven by strong domestic demand for electronics, electrical equipment, and machinery, particularly investments linked to artificial intelligence.
Despite domestic strength, the sector faces significant headwinds. New export orders have declined for 15 consecutive months due to high shipping costs and tariffs. Additionally, rising energy costs and supply-chain bottlenecks have increased inflationary pressures. These trends, combined with a drop in weekly unemployment claims to 197,000, have led to market speculation that the Federal Open Market Committee may implement further interest rate hikes to manage the tight labor market and soaring prices.
