U.S. manufacturing expanded in July at its fastest pace in more than four years, with the Institute for Supply Management (ISM) Manufacturing PMI registering 55.6 percent — a 2.3-percentage-point jump from June and the highest reading since May 2022. For foodservice equipment dealers, consultants, and operators tracking capital-goods procurement conditions, the headline number signals a broadly strengthening industrial economy, but the detail beneath it tells a more complex story for back-of-house sourcing.
Food, Beverage & Tobacco Products was among the four largest manufacturing sectors reporting expansion in July, alongside Transportation Equipment, Machinery, and Computer & Electronic Products. The sector also showed expanding order backlogs and employment growth, while customers' inventories in the category remained in "too low" territory — a condition ISM considers a positive indicator for future production demand. That dynamic matters for commercial kitchen operators and ghost kitchen operators planning equipment refreshes: foodservice-adjacent manufacturers are running lean, which can tighten availability windows for fabricated components used in cooking, refrigeration, and warewashing equipment.
Lead Times and Price Pressure
The supply-chain backdrop for equipment specifiers remains challenging. The ISM Prices Index registered 71.1 percent in July — still deep in expansion (price-increasing) territory for the 22nd consecutive month, though down 1.9 percentage points from June's 73.0 percent reading. ISM survey chair Susan Spence, MBA, cited three persistent drivers: steel and aluminum cost increases rippling through the entire value chain, tariffs on imported goods, and petroleum-based product inflation tied to Middle East conflict. For commercial kitchen equipment buyers, steel and aluminum are foundational inputs across cooking ranges, refrigeration cabinets, warewashing racks, and prep tables — meaning list-price relief is not imminent.
Supplier delivery times continued to slow for the eighth consecutive month, with the Supplier Deliveries Index reaching 58.9 percent. Capital expenditure lead times averaged 172 days in July, one day more than June. Production Materials lead times averaged 87 days, up three days from June, while MRO Supplies averaged 50 days. Dealers stocking replacement parts or operators ordering equipment for new kitchen buildouts should factor these extended windows into project timelines, particularly for electrical components and electronic controls — both of which appeared on ISM's commodities-in-short-supply list for the 13th and 17th consecutive months, respectively.
What It Means for Equipment Buyers
One Electrical Equipment, Appliances & Components respondent in the ISM survey noted price increases of 5 to 25 percent for printed circuit board assembly components and 15 to 45 percent for bare boards, warning the trend "isn't sustainable." Commercial kitchen equipment manufacturers that rely on programmable controls, solid-state ignition, or IoT-enabled monitoring systems are exposed to this same component-cost pressure, which is increasingly being passed through to equipment list prices.
On the positive side, the Employment Index entered expansion territory for the first time in 33 months, registering 52.8 percent. Food, Beverage & Tobacco Products was among the three large industries reporting higher employment in July. A healthier labor market in food manufacturing generally tracks with increased capital investment in production capacity — including kitchen automation, cold-chain storage, and commissary kitchen infrastructure — as operators seek throughput gains without proportional headcount growth. Consultants specifying energy-and-sustainability upgrades or large-format commissary builds should note that manufacturer backlogs are growing, making early equipment specification and purchase-order commitment increasingly important.
For dealers and operator equipment specifiers watching refrigeration and cold-chain procurement, the continued "too low" status of customers' inventories across the Food, Beverage & Tobacco sector — now in that condition for 22 consecutive months — suggests sustained upstream demand that could further stress component and finished-goods availability through the balance of 2026.
Written by Michael Politz, Author of Guide to Restaurant Success: The Proven Process for Starting Any Restaurant Business From Scratch to Success (ISBN: 978-1-119-66896-1), Founder of Food & Beverage Magazine, the leading online magazine and resource in the industry. Designer of the Bluetooth logo and recognized in Entrepreneur Magazine's "Top 40 Under 40" for founding American Wholesale Floral, Politz is also the Co-founder of the Proof Awards and the CPG Awards and a partner in numerous consumer brands across the food and beverage sector.
