July’s 55.6% PMI highest in 4 years; LTL carriers getting bullish

July’s manufacturing data showed a stronger-than-expected push into expansion territory. A survey of manufacturing supply executives returned a 55.6 reading for the month, 2.3 percentage points above June and the highest reading since May 2022. New orders increased, inventories remained “too low” and manufacturing employment turned positive for the first time in 33 months. A reading above 50 for the Institute for Supply Management’s Manufacturing PMI signals expansion, while one below 50 indicates contraction. A sustained level above 47.5 signals the overall economy is growing. July marked the seventh straight month of expansion for the dataset. The update was 1.6 points ahead of analysts’ expectations and consistent with real GDP growth of 2.8%, the Monday report said. The new orders subindex—an indicator of future activity—was also higher for a seventh consecutive month at 56.7. That was 70 basis points higher than June. Demand sentiment around orders improved to a ratio of 3.5-to-1 positive-to-negative comments. The ratio was 2.7-to-1 in June. Manufacturing recovery showing in LTL volumes The manufacturing complex has an outsized impact on less-than-truckload demand, with roughly two-thirds of LTL volumes tied to industrial output. Inflections in ISM data usually lead LTL tonnage by a few months. Four publicly traded LTL carriers reported second-quarter results last week. On average, tonnage was up 2.6% year over year in the quarter, with preliminary results for July showing tonnage growth of 5.1% y/y. The group first saw tonnage turn positive in March. Weight per shipment was 3% higher y/y on average in the second quarter, as more truckload shipments moved back to LTL networks and as the freight mix is skewing more industrial. Management teams were a little more upbeat about the July trends as well. ArcBest ( NASDAQ: ARCB ) normally sees a 4.6% tonnage decline from June to July, but tonnage was off just 1% this year (360 bps of outperformance). XPO ( NYSE: XPO ) reported 400 bps of outperformance while Old Dominion Freight Line’s ( NASDAQ: ODFL ) sequential volume trends were 250 bps better than typical seasonality during the month. Saia’s ( NASDAQ: SAIA ) July sequential tonnage trend was slightly subseasonal, but it implemented a 7.1% general rate increase on July 6, creating some short-term volatility . XPO noted “a lot of positivity from customers,” with twice as many now expecting their businesses to accelerate in the back half of the year. Tightness across the transportation space could be seen in the ISM’s supplier deliveries subindex, which measures “delivery performance of suppliers to manufacturing organizations.” A 58.9 reading (1.5 points higher than June) signaled slower deliveries and potential supply chain constraints for an eighth straight month. Of the 13 manufacturing industries tracked, “no industries reported that supplier deliveries were faster in July compared to June.” Customers’ inventories remained too low at 40.7, down 1.6 points sequentially. Employment (52.8) was up 3.1 points, as production (58.5) increased 6.3 points and the backlog (55) was up 4.5 points. Sixty percent of respondents said their companies are hiring, while the remainder are “managing head counts.” Why it matters? The recent manufacturing surge directly impacts freight capacity, delivery timelines and logistics costs. More FreightWaves articles by Todd Maiden: Schneider National pushes price amid market imbalance Saia’s Q3 margin guidance disappoints investors XPO’s Q2 earnings beat expectations behind strong LTL performance Upcoming FreightWaves Events Compliance Brokerage Compliance Symposium The day before F3. Every compliance issue you face - fraud exposure, carrier liability, FMCSA rules, cargo theft, insurance gaps - navigated by attorneys and operators defining best practices in a changing industry. October 26, 2026 The Signal at Chattanooga Choo Choo • Chattanooga, TN Register Now Awards F3 Awards Dinner The night before F3. FreightTech100 companies honored. FreightTech 25 and Shipper of Choice winners revealed live. Cocktail reception into dinner and live music - 300 industry leaders in one purpose-built room. October 26, 2026 The Signal at Chattanooga Choo Choo • Chattanooga, TN Register Now FreightTech F3: Future of Freight Festival Industry-defining keynotes, rapid-fire technology demos, and industry leaders networking in experiences across Chattanooga - plus the inaugural F3 Awards Dinner featuring the FreightTech and Shipper of Choice reveals. October 27, 2026 – October 28, 2026 The Signal at Chattanooga Choo Choo • Chattanooga, TN Register Now Compliance Brokerage Compliance Symposium Oct 26 • The Signal at Chattanooga Choo Choo • Chattanooga, TN The day before F3. Every compliance issue you face - fraud exposure, carrier liability, FMCSA rules, cargo theft, insurance gaps - navigated by attorneys and operators defining best practices in a changing industry. The Signal at Chattanooga Choo Choo