Manufacturing in the U.S. down for the sixth straight month after a 30-month period of expansion. PHOTO by Pexels.
Activity in the U.S. manufacturing sector contracted in May for the seventh consecutive month following a 28-month period of growth, say the nation’s supply executives in the latest Manufacturing ISM Report On Business.
“The May Manufacturing PMI registered 46.9 percent, 0.2 percentage point lower than the 47.1 percent recorded in April. Regarding the overall economy, this figure indicates a sixth month of contraction after a 30-month period of expansion,” said Timothy R. Fiore, CPSM, C.P.M., Chair of the Institute for Supply Management (ISM) Manufacturing Business Survey Committee. “The U.S. manufacturing sector shrank again, with the Manufacturing PMI losing a bit of ground compared to the previous month, indicating a faster rate of contraction. The May composite index reading reflects companies continuing to manage outputs to better match demand for the first half of 2023 and prepare for growth in the late summer/early fall period. However, there is clearly more business uncertainty in May.”
Looking at specific indicators:
- The New Orders Index remained in contraction territory at 42.6 percent, 3.1 percentage points lower than the figure of 45.7 percent recorded in April.
- The Production Index reading of 51.1 percent is a 2.2-percentage point increase compared to April’s figure of 48.9 percent.
- The Prices Index registered 44.2 percent, down 9 percentage points compared to the April figure of 53.2 percent.
- The Backlog of Orders Index registered 37.5 percent, 5.6 percentage points lower than the April reading of 43.1 percent.
- The Employment Index indicated another month of expansion, registering 51.4 percent, up 1.2 percentage points from April’s reading of 50.2 percent.
- The Supplier Deliveries Index figure of 43.5 percent is 1.1 percentage points lower than the 44.6 percent recorded in April; this is the index’s lowest reading since March 2009 (43.2 percent).
- The Inventories Index dropped 0.5 percentage point to 45.8 percent; the April reading was 46.3 percent.
- The New Export Orders Index reading of 50 percent is 0.2 percentage point higher than April’s figure of 49.8 percent. The Imports Index remained in contraction territory, registering 47.3 percent, 2.6 percentage points lower the 49.9 percent reported in April.
