Economic activity in US manufacturing sector contracts in May: ISM

05 Jun '23

2 min read

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After a 28-month period of growth, economic activity in the US manufacturing sector contracted in May for the seventh consecutive month, the Institute of Supply Management found.
Apparel, leather & allied products and textile mills were among the 14 industries reporting contraction in May.
ISM clearly observed more business uncertainty in May.

Economic activity in the US manufacturing sector contracted in May for the seventh consecutive month following a 28-month period of growth, according to the latest manufacturing report on business by the Tempe, Arizona-based Institute of Supply Management (ISM).

The May manufacturing purchasing managers’ index (PMI) registered 46.9 per cent, 0.2 percentage point lower than the reading of 47.1 per cent 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, ISM manufacturing business survey committee chair, in a release.

The new orders Index remained in contraction territory at 42.6 per cent, 3.1 percentage points lower than 45.7 per cent recorded in April.

The production index reading of 51.1 per cent is a 2.2-percentage point increase compared to April's 48.9 per cent.

The prices index registered 44.2 per cent, down by 9 percentage points compared to April’s 53.2 per cent.

The backlog of orders index registered 37.5 per cent, 5.6 percentage points lower than April’s 43.1 per cent.

The employment index indicated another month of expansion, registering 51.4 per cent—up by 1.2 percentage points from April's 50.2 per cent.

The supplier deliveries index figure of 43.5 per cent is 1.1 percentage points lower than the 44.6 per cent recorded in April; this is the index's lowest reading since March 2009 (43.2 per cent).

The inventories index dropped by 0.5 percentage point to 45.8 per cent; the April reading was 46.3 per cent.

The new export orders index reading of 50 per cent is 0.2 percentage point higher than April's 49.8 per cent.

The imports index remained in contraction territory, registering 47.3 per cent, 2.6 percentage points lower than 49.9 per cent reported in April.

Apparel, leather & allied products and textile mills were among the 14 industries reporting contraction in May.

"The US 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,” Fiore said.

He, however, clearly observed more business uncertainty in May.

Fibre2Fashion News Desk (DS)

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