A part that used to take four weeks now takes ten. A customer is asking for a ship date, and the honest answer is that you don’t have one yet. A single component, the kind nobody thought twice about buying a year ago, is now the reason an entire order is sitting unfinished.
If that has been the shape of your year, the data backs up what companies are already feeling. New orders actually eased in August. Deliveries got slower anyway. That gap is the story worth paying attention to in the latest ISM Manufacturing report, because it rules out the easiest explanation for why lead times keep stretching: too many orders chasing too little capacity.
The Institute for Supply Management’s Supplier Deliveries Index, the report’s measure of how quickly suppliers are getting goods to manufacturers, registered 59.3 percent in August, up from 58.9 percent in July. That index reads backward from most economic indicators. A reading above 50 means deliveries are getting slower, not faster.
August marked the ninth straight month the index has moved in that direction. Lead times were also the single most-cited complaint among survey respondents in August, showing up in 46 percent of negative comments, more than tariffs, more than the conflict in the Middle East, more than pricing. It isn’t only ISM’s survey picking this up, either. Distributors tracking industrial component availability directly are seeing the same slide, with harder numbers attached.
What’s Actually Driving Longer Lead Times
IBS Market Intelligence, which tracks industrial component inventory and lead times directly rather than surveying sentiment, reports that component inventory held in distribution is now 18 percent below May 2025 levels, while average lead times across all tracked categories climbed to 20.6 weeks in July, up from 16.7 weeks in February. These are not exotic parts. They cover the sensors, relays, contactors, power semiconductors, and connectors that run factory automation, industrial control systems, robotics, and processing equipment, the everyday inventory of a small manufacturer’s parts bin, not just AI server components.
The AI connection is real, but it works differently than most people assume. The GPU shortage that defined 2024 and early 2025 has actually started to ease. TSMC’s packaging capacity ramped through the year, and lead times on Nvidia’s Blackwell B200 chips fell from more than six months in early 2026 to 10 to 14 weeks by July. The pressure has moved instead to the parts that surround the chip: power delivery components, optical networking hardware, and memory.
Chipmakers spent years investing cautiously in the mature-node capacity that produces everyday power ICs, the same components used in industrial motor drives and automotive systems, while capital flowed toward the advanced nodes built for AI accelerators. That underinvestment is now showing up as a real shortage. Power semiconductor lead times are running 20 to 30 weeks industry-wide, and high-speed optical transceivers, used in the networking gear behind both data centers and industrial automation, have pushed past 40 weeks in some categories.
From Computer and Electronic Products: “Supply chain situation, especially in the electronics market, is going through another crisis even bigger and more complicated than during and post COVID-19. That’s mainly due to AI infrastructure and uncertainties in the global market for oil and other critical supplies due to war in the Middle East and more complication on trade rules.”
Machinery manufacturers are running into a version of the same problem from a different angle. Even the equipment used to build more semiconductor capacity is backordered. Lead times on chip-making equipment itself run 18 to 30 weeks, which means the industry cannot expand its way out of the shortage quickly. ISM’s own data adds a concrete number to this from the buyer side: the average commitment lead time manufacturers reported for capital expenditures reached 172 days in July, a day longer than June, while lead time for production materials reached 87 days, three days longer than the month before.
From Machinery: “Photonics, high speed connectors, semiconductors and government orders are expanding significantly. Supply chains domestically and globally are difficult, with increases in lead times and cost.”
Labor is adding friction on top of parts availability. Electrical panel assembly shops that support equipment manufacturers have reported their own skilled labor shortages, adding two to four weeks to control panel production even when every component is on hand and on time.
Tariffs and geopolitical disruption compound the pressure further. Section 232 tariffs on steel and aluminum continue to weigh on manufacturers outside the electronics space, and uncertainty tied to the conflict in the Middle East showed up in nearly a third of August’s ISM survey comments. Neither is the main driver behind lead times specifically. Both are adding friction to a supply chain that was already stretched thin.
This Isn’t a One-Month Story
None of this is new as of August, and it isn’t only ISM’s read on the data. The ISM Supplier Deliveries Index crossed into slower-delivery territory in December 2025 at 50.8 percent, climbed through the mid-50s in January and February, jumped to 58.9 percent in March, its highest reading since mid-2022 at the time, and peaked at 60.6 percent in May before easing slightly into the high 50s, where it has stayed through the summer. That is nine consecutive months in the same direction.
IBS Market Intelligence’s lead time tracking shows the same slide over a shorter, more recent window, from 16.7 weeks in February to 20.6 weeks in July. Two independently tracked data sets, measuring different things in different units, are describing the same deterioration. A single bad month is noise. Two data sets holding the same direction for months at a time is a pattern worth planning around rather than waiting out.
What It Means for Buyers
For procurement and sourcing teams, the practical response is less about predicting when this eases and more about building in room for it not to.
Start with a straightforward audit. Pull the bill of materials and flag anything that is long-lead, single-source, or covered by only one qualified vendor, particularly in the categories showing the most stress right now: power semiconductors, optical and networking components, and automotive-grade microcontrollers. A part with no history of trouble isn’t guaranteed to stay that way. Several of the categories under the most pressure this year were considered stable as recently as last summer.
From there, build the buffer in before it is needed rather than after. That means padding lead time assumptions into purchase orders now, treating electronics-adjacent and metals-dependent categories as higher risk for the next few quarters, and giving customers realistic delivery expectations up front rather than promising a timeline the supply chain cannot support. A conservative estimate that holds is worth more to a customer relationship than an optimistic one that slips.
Qualifying a second supplier matters more this year than in a normal year, and it works best done ahead of a shortage, not in the middle of one. Distributors report they are increasingly prioritizing customers with standing, longer-term agreements over one-time spot buyers when allocating tight supply, which means a company without an existing relationship in a stressed category may find itself at the back of the line exactly when it needs parts most. Reaching out now, even for categories that are not yet a problem, is worth the time.
None of this requires guessing where a backup supplier might exist. There are more than 360,000 verified U.S. industrial suppliers spread across 11,000 product and service categories, which means a viable alternative almost always exists somewhere. The harder part is usually knowing where to look before the pressure hits, not whether an option exists at all.
Where This Leaves Manufacturers
Not every comment in August’s ISM report was a warning sign.
From Miscellaneous Manufacturing: “Commentary this month echoes that of recent months: significant availability and price challenges in commodities heavily consumed by AI, great uncertainty over when the Iran conflict will end, and another round of shifting U.S. tariff policy. Despite these tensions, we continue to focus on what we can control, and the market for our products remains strong.”
That is probably the right way to read the data too. Lead times are genuinely stretched, and the trend has held long enough, across more than one independent data source, to treat it as structural rather than temporary. But manufacturing activity itself is still expanding, for an eighth straight month as of August, and demand has not collapsed. This is a supply problem sitting on top of a reasonably healthy demand environment, rather than a downturn.
That distinction matters for how a manufacturer responds. The instinct in a tightening market is to over-order everything at once, but a rush to stockpile tends to make the underlying shortage worse for everyone, including the company doing the stockpiling once prices rise in response. The more useful response is targeted rather than broad: identify the specific categories genuinely at risk, secure those, and avoid tying up working capital in parts that were never actually in danger.
The companies managing this well are taking a measured approach. Rather than waiting for conditions to improve or over-ordering out of caution, they are quietly lining up alternatives in the categories that matter, well before a delay turns into a missed shipment. If that includes finding a backup supplier, IndustryNet’s supplier search is a place to start.
Sources
https://www.prnewswire.com/news-releases/manufacturing-pmi-at-54-6-august-2026-ism-manufacturing-pmi-report-302865127.html
https://www.prnewswire.com/news-releases/manufacturing-pmi-at-55-6-july-2026-ism-manufacturing-pmi-report-302840669.html
https://www.ibselectronics.com/resources/blog/industrial-component-supply-comes-under-pressure-in-2026/
https://tech-insider.org/us-ai-data-center-delays-cancellations-7gw-capacity-crisis-2026/
https://accuristech.com/blog/ai-data-center-electronic-component-supply/
https://www.utmel.com/blog/categories/semiconductor/power-semiconductors-shortage-outlook-2026-supply-lead-times-and-sourcing-options
https://globx.eu/blog/supply-chain-insight/ai-infrastructure-semiconductor-supply-chain-2026
https://www.ic-online.com/blog/post/2026-electronic-component-shortage-update-for-buyers-how-to-secure-your-supply-chain
https://www.californiapulse.com/post/supply-chain-disruptions-finishing-equipment-lead-times
