Manufacturing, Economy Grow Again In May: ISM
cent, a decrease of 4 percentage points compared to the April reading of 62.5 percent. The Backlog of Orders In- dex registered 70.6 percent, 2.4 percentage points higher compared to the April reading of 68.2 percent. The Em- ployment Index registered 50.9 percent; 4.2 percentage points lower than the April reading of 55.1 percent. The Supplier Deliveries Index registered 78.8 percent, up 3.8 percentage points from the April figure of 75 percent. “The Inventories Index registered 50.8 percent, 4.3 percentage points higher than the April reading of 46.5 percent. The Prices Index registered 88 percent, down 1.6 percentage points compared to the April reading of 89.6 percent. The New Export Orders Index registered 55.4 percent, an increase of 0.5 percentage point compared to the April reading of 54.9 percent. The Imports Index regis- tered 54 percent, a 1.8-percentage point increase from the April reading of 52.2 percent.” “The manufacturing economy continued expansion in
Economic activity in the manufacturing sector grew in May, with the overall economy notching a 12th consecutive month of growth, say the nation’s supply executives in the latest Manufacturing ISM Report On Business. The report was issued last week by Timothy R. Fiore, CPSM, C.P.M., Chair of the Institute for Supply Manage- ment (ISM) Manufacturing Business Survey Committee: “The May Manufacturing PMI® registered 61.2 percent, an increase of 0.5 percentage point from the April reading of 60.7 percent. This figure indicates expansion in the over- all economy for the 12th month in a row after contraction in April 2020. The New Orders Index registered 67 percent, increasing 2.7 percentage points from the April reading of 64.3 percent. The Production Index registered 58.5 per-
May. Business Survey Committee panelists reported that their companies and suppliers continue to struggle to meet increasing lev- els of demand. Record-long lead times, wide- scale shortages of critical basic materials, rising commodities prices and difficulties in transporting products are continuing to affect all segments of the manufacturing economy. Worker absenteeism, short-term shutdowns due to part shortages, and difficulties in filling open positions continue to be issues that lim- it manufacturing-growth potential. “Optimistic panel sentiment increased, with 36 positive comments for every cautious comment, compared to an 11-to-1 ratio in April. Demand expanded, with the (1) New Orders Index growing at a strong level, supported by the New Export Orders Index continuing to expand, (2) Customers’ Inventories Index hitting another all-time low and (3) Backlog of Orders Index continuing at a record-high level. Consumption (measured by the Pro- duction and Employment indexes) indicated slowing expansion, posting a combined 8.2 percentage point decrease to the Manufac- turing PMI calculation. “The Employment Index expanded for the sixth straight month, but panelists continue to note significant difficulties in attracting and retaining labor at their companies’ and suppliers’ facilities. Consumption was clearly limited due to labor issues and supply con- straints as demand remains very high. Inputs — expressed as supplier deliveries, inven- tories, and imports — continued to support input-driven constraints to production expan- sion, at higher rates compared to April, due to continued trouble in supplier deliveries.
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