US manufacturing expands to highest level since May 2022: PMI
Economic activity in the U.S. manufacturing sector expanded in May for the fifth consecutive month to 54%, 1.3 percentage points higher than April and the highest reading since May 2022, according to the Institute for Supply Management’s latest Purchasing Managers’ Index.
The overall economy grew for the 19th month in a row, ISM reported. A PMI index below 50% indicates an industry in contraction.
The S&P Global US Manfacturing PMI showed a slightly higher rate of expansion, registering 55.1, up from 54.5 in April.
“Not only are we in the fifth month of expansion, but the indices are all going in the right direction,” Susan Spence, chair of ISM’s Manufacturing Business Survey Committee, said during a media call on Monday.
“In May, 25% of the comments were positive and 69% negative, with a 1-to-2.7 ratio of positive to negative sentiment,” Spence said in a news release. “Among comments, the Iran war was mentioned in 42% and tariffs in 18%.” She added that 57% of panelists mentioned pricing volatility as an issue for their companies.
The New Orders Index expanded for the fifth consecutive month after four straight readings in contraction, registering 56.8%, up 2.7 percentage points compared to April’s figure of 54.1%. The Production Index registered 54.3%, 0.9 percentage point higher than April’s reading of 53.4%.
The Supplier Deliveries Index indicated slowing performance for the sixth month in a row after one month in “faster” territory. The reading of 60.6% reached its April figure after the index increased in each of the previous five months.
The Inventories Index registered 49.9%, up slightly from April’s reading of 49%.
The Employment Index registered 48.6%, up 2.2 percentage points from 46.4% in April. Manufacturing lost a net2,000 jobs in April, with the transportation equipment sector losing the most jobs at 3,600. ISM said that among panelists, 50% indicated that managing head counts remains the norm at their companies,while 50% are hiring.
The Prices Index remained in expansion, registering 82.1%, a 2.5-percentage point decrease from April’s reading of 84.6%.
