The latest report by IHS Markit revealed on Wednesday the seasonally adjusted IHS Markit final U.S. Manufacturing Purchasing Managers’ Index (PMI) came in at 61.1 in August, down from 63.4 in July and marginally lower than the earlier released “flash” reading of 61.2. The August reading pointed to a noticeable improvement in operating conditions, which, however, was the softest in the last four months.

Economists had forecast the index to stay unrevised at 61.2.

According to the report, the August expansion was supported by steep upturns in production and new orders. Nevertheless, output growth was reportedly hampered by capacity constraints and material shortages. In addition, lead times for inputs extended further as cost burdens soared, with the pace of inflation reaching a fresh series high. Elsewhere, employment growth eased as firms struggled to retain staff and find suitable candidates for current vacancies.