Down 0.5 points from April, the ISM (Institute for Supply Management) Manufacturing PMI registered 48.7% in May. This is the second consecutive month of contraction, and the reading indicates that manufacturing is contracting at a faster rate.
“U.S. manufacturing activity continued in contraction after growing in March, the first expansion for the sector since September 2022,” says Timothy Fiore, chair of the ISM’s manufacturing business survey committee. “Two out of five subindexes that directly factor into the Manufacturing PMI are in expansion territory, up from one in April.”
After seven months of contraction, the employment index entered expansion territory with a reading of 51.1%, 2.5 points higher than April. Anything lower than 50% represents contraction.
Although 1.1 points lower than the previous month, the production index continued to register growth in May with a figure of 50.2%. The new orders index indicated contraction at a faster rate, losing 3.7 points for a May reading of 45.4%.
“Of the six biggest manufacturing industries, two (fabricated metal products and chemical products) registered growth in May,” says Fiore.
The comments of the survey continue to highlight how business conditions are largely influenced by sector, with respondents reporting vastly different experiences with bookings and demand.
Despite these variations, inflation and other economic concerns seem to span across industries.
“Concerns with the economy continue to drive business decisions,” writes an executive in the transportation equipment sector.
