Factory activity in US hits strongest pace since 2022 Article originally posted on CoStar on August 3, 2026 AI buildout fuels data-center manufacturing boom Factory activity accelerated in July to its strongest pace in more than four years, according to a survey of manufacturing firms. The Institute for Supply Management’s purchasing managers index released Monday rose to 55.6 from 53.3 in June, the highest reading since May 2022. Readings above 50 indicate expansion. The survey’s new-orders gauge grew for a seventh straight month, suggesting demand remained resilient. The production index jumped to 58.5, its highest level since November 2021. The employment index also returned to expansion territory for the first time in 33 months. Price pressures remained elevated across the manufacturing sector. Still, the prices-paid index eased to 71.1 from 73.0 in June, signaling that costs continued to rise but at a slower pace. One machinery manufacturer surveyed by ISM said products going into data centers are at “full procurement and manufacturing ramp-up” as global AI infrastructure buildouts move into a phase of “real activation.” Demand for semiconductor, power, networking and photonics products is “booming,” the respondent said.