ISM: US Manufacturing Expanded in May, Exceeds Expectations

Written by David Schollaert

The outlook among purchasing managers surveyed by the Institute for Supply Management was positive in May. US manufacturing activity grew at a slightly faster rate than anticipated as the six biggest manufacturing industries registered moderate to strong growth last month.

May’s Manufacturing PMI rose to 56.1%, a 0.7 percentage point gain compared to a reading of 55.4% in March. The index reading above 50% indicates growth in the manufacturing sector. May’s measure marks the 24th consecutive month of expansion since the Covid-19 outbreak in the spring of 2020.

“The US manufacturing sector remains in a demand-driven, supply chain-constrained environment,” said Timothy Fiore, chairman of ISM’s Manufacturing Business Survey Committee. “Despite the Employment Index contracting in May, companies improved their progress on addressing moderate-term labor shortages at all tiers of the supply chain.”

  • The Employment Index registered 49.6% in May. The reading was 1.3 percentage points lower than April’s 50.9%.
  • The New Orders Index registered 55.1% in May, up 1.6 percentage points from the April reading of 53.5%.
  • The New Export Orders Index was 52.9%, up 0.2 percentage points compared to the April reading of 52.7%.
  • The Inventories Index registered 55.9% in May, 4.3 percentage points higher than the 51.6% reported for April.

Fiore said the big picture was that “manufacturing improved even though global supply chains have dampened activity.”

ISM Business PMI Fig1

ISM Business PMI Fig2

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By David Schollaert,

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