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Tuesday, November 26, 2024
HomeNewsEconomyISM: Manufacturing Report on Business Shows Tepid Growth in May

ISM: Manufacturing Report on Business Shows Tepid Growth in May

ISM-manufacturing-index
ISM-manufacturing-index

The Institute for Supply Management’s Manufacturing Report On Business Survey. (Photo: REUTERS)

The Institute for Supply Management’s Manufacturing Report on Business shows the manufacturing sector expanded in May for the third consecutive month. However, while the overall economy grew for the 84th consecutive month, manufacturing has lagged behind.

“The May PMI registered 51.3 percent, an increase of 0.5 percentage point from the April reading of 50.8 percent,” Bradley J. Holcomb, CPSM, CPSD, chair of the Institute for Supply Management Manufacturing Business Survey Committee. “The New Orders Index registered 55.7 percent, a decrease of 0.1 percentage point from the April reading of 55.8 percent. The Production Index registered 52.6 percent, 1.6 percentage points lower than the April reading of 54.2 percent.”

MANUFACTURING AT A GLANCE
MAY 2016
Index Series
Index
May
Series
Index
Apr
Percentage
Point
Change
Direction Rate
of
Change
Trend*
(Months)
PMI® 51.3 50.8 +0.5 Growing Faster 3
New Orders 55.7 55.8 -0.1 Growing Slower 5
Production 52.6 54.2 -1.6 Growing Slower 5
Employment 49.2 49.2 0.0 Contracting Same 6
Supplier Deliveries 54.1 49.1 +5.0 Slower From
Faster
1
Inventories 45.0 45.5 -0.5 Contracting Faster 11
Customers’ Inventories 50.0 46.0 +4.0 Unchanged From
Too Low
1
Prices 63.5 59.0 +4.5 Increasing Faster 3
Backlog of Orders 47.0 50.5 -3.5 Contracting From Growing 1
New Export Orders 52.5 52.5 0.0 Growing Same 3
Imports 50.0 50.0 0.0 Unchanged Same 2
OVERALL ECONOMY Growing Faster 84
Manufacturing Sector Growing Faster 3

Manufacturing ISM® Report On Business® data is seasonally adjusted for New Orders, Production, Employment and Supplier Deliveries indexes.

*Number of months moving in current direction.

Still, the ISM’s closely-watched gauge of manufacturing activity nationwide follows regional data indicating contraction. Earlier this week, the Chicago Business Barometer, the ISM’s gauge of Midwest manufacturing, fell in May to 49.3 from 50.4 the month prior.  The Empire State Manufacturing Survey plummeted in May further into contraction, as well.

“The Employment Index registered 49.2 percent, the same reading as in April. Inventories of raw materials registered 45 percent, a decrease of 0.5 percentage point from the April reading of 45.5 percent,” Mr. Holcomb said. “The Prices Index registered 63.5 percent, an increase of 4.5 percentage points from the April reading of 59 percent, indicating higher raw materials prices for the third consecutive month. Manufacturing registered growth in May for the third consecutive month, as 14 of our 18 industries reported an increase in new orders in May (down from 15 in April), and 12 of our 18 industries reported an increase in production in May (down from 15 in April).”

Of the 18 manufacturing industries, 12 are reporting growth in May in the following order: Wood Products; Textile Mills; Printing & Related Support Activities; Fabricated Metal Products; Paper Products; Plastics & Rubber Products; Computer & Electronic Products; Miscellaneous Manufacturing; Electrical Equipment, Appliances & Components; Food, Beverage & Tobacco Products; Machinery; and Primary Metals. The six industries reporting contraction in May — listed in order — are: Apparel, Leather & Allied Products; Petroleum & Coal Products; Transportation Equipment; Nonmetallic Mineral Products; Chemical Products; and Furniture & Related Products.

Written by

PPD Business, the economy-reporting arm of People's Pundit Daily, is "making sense of current events." We are a no-holds barred, news reporting pundit of, by, and for the people.

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