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Economic activity in the manufacturing sector expanded in May and the overall economy grew for the 109th consecutive month, according to the latest Manufacturing ISM Report On Business from the Institute for Supply Management. The May Purchasing Managers Index registered 58.7 percent, an increase of 1.4 percentage points compared to April.
The results indicate continued strength in the manufacturing sector, although employment resources and supply chains continue to struggle, ISM said.
New Orders, Production, and Employment all increased during the month. The Inventories Index fell 2.7 percentage points from April, and Customers’ Inventories remained at low levels. The Prices Index increased 0.2 percentage point, indicating higher raw materials prices for the 27th straight month. Supplier deliveries to manufacturing organizations slowed during the month, as the Supplier Deliveries Index registered 62, a 0.9 percentage point increase compared to April. This marked the 20th straight month of slower deliveries. An Index above 50 indicates slowing deliveries.
“Lead-time extensions for production materials, supplier labor shortages, transportation delays, and ongoing uncertainty in the steel and aluminum markets continue to restrict production output ... ,” according to Timothy R. Fiore, chairman of ISM’s Manufacturing Business Survey Committee.
Demand remains strong despite such challenges, as the New Orders Index remained above 60 for the 13th straight month.
Of the 18 manufacturing industries surveyed, 16 reported growth in May: Textile Mills; Nonmetallic Mineral Products; Electrical Equipment, Appliances and Components; Printing and Related Support Activities; Fabricated Metal Products; Furniture and Related Products; Machinery; Chemical Products; Food, Beverage and Tobacco Products; Computer and Electronic Products; Petroleum and Coal Products; Plastics and Rubber Products; Miscellaneous Manufacturing; Transportation Equipment; Paper Products; and Primary Metals. No industry reported a decrease in PMI in May compared to April, ISM said.