ISM: May PMI Lowest in 12 Months
TEMPE, AZ – Economic activity in the manufacturing sector expanded in May for the 22nd consecutive month, but both new orders and production took hits.
The May PMI dropped 6.9 percentage points to 53.5%, says the Institute for Supply Management, which tracks the monthly data. New orders fell 10.7 points to 51%, while production decreased 9.8 points to 54%. Inventories were down 4.9 percentage points to 48.7%, and customer inventories dipped a slight 1 point to 39.5%. Backlogs were down 10.5 points to 50.5%.
“The PMI registered 53.5% and indicates expansion in the manufacturing sector for the 22nd consecutive month,” said Bradley J. Holcomb, chair of ISM’s manufacturing business survey committee. “This month’s index, however, registered 6.9 percentage points below the April reading of 60.4%, and is the first reading below 60% for 2011, as well as the lowest PMI reported for the past 12 months. Slower growth in new orders and production are the primary contributors to this month’s lower PMI reading. Manufacturing employment continues to show good momentum for the year, as the employment index registered 58.2%, which is 4.5 percentage points lower than the 62.7% reported in April. Manufacturers continue to experience significant cost pressures from commodities and other inputs.”
The overall economy grew for the 24th consecutive month, the firm says.
