May Manufacturing ISM Report On Business Shows Continuing Growth In the Manufacturing Sector

The Manufacturing ISM Report On Business is published monthly by the Institute for Supply Management (ISM), the largest supply management organization in the world, as well as one of the most respected. Economic activity in the manufacturing sector expanded in May for the 29th consecutive month, and the overall economy grew for the 72nd consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business.

Manufacturing expanded in May as the PMI registered 52.8 percent, an increase of 1.3 percentage points over the April reading of 51.5 percent, indicating growth in manufacturing for the 29th consecutive month.

ISM's New Orders Index registered 55.8 percent in May, an increase of 2.3 percentage points when compared to the April reading of 53.5 percent, indicating growth in new orders for the 30th consecutive month.

ISM's Production Index registered 54.5 percent in May, which is a decrease of 1.5 percentage points when compared to the 56 percent reported in April, indicating growth in production for the 33rd consecutive month.

ISM's Employment Index registered 51.7 percent in May, which is an increase of 3.4 percentage points when compared to the 48.3 percent reported in April, and indicates a return to growth in employment following only one month of contraction in the past 24 months.

The delivery performance of suppliers to manufacturing organizations slowed in May at a faster rate as the Supplier Deliveries Index registered 50.7 percent. This month's reading is 0.6 percentage point higher than the 50.1 percent reported in April.

The Inventories Index registered 51.5 percent in May, which is 2 percentage points higher than the 49.5 percent registered in April, indicating raw materials inventories are growing in May following a month of contraction in inventories in April.

ISM's Backlog of Orders Index registered 53.5 percent in May, an increase of 4 percentage points over the April reading of 49.5 percent, indicating growth in order backlogs following two consecutive months of contraction in the backlog of orders. Of the 88 percent of respondents who measure their backlog of orders, 26 percent reported greater backlogs, 19 percent reported smaller backlogs, and 55 percent reported no change from April.

Of the 18 manufacturing industries, 14 are reporting growth in May in the following order: Apparel, Leather & Allied Products; Furniture & Related Products; Paper Products; Food, Beverage & Tobacco Products; Nonmetallic Mineral Products; Plastics & Rubber Products; Electrical Equipment, Appliances & Components; Primary Metals; Transportation Equipment; Printing & Related Support Activities; Fabricated Metal Products; Machinery; Miscellaneous Manufacturing; and Chemical Products. The two industries reporting contraction in May are: Textile Mills; and Computer & Electronic Products.

Keywords: Automation, Manufacturing, Process Industries, Discrete Industries, Supply Management, PMI, ISM, ARC Advisory Group.