The Institute for Supply Management reported that the Manufacturing Purchasing Managers Index declined to 46.9% in May, lower than the 47.1% recorded in April. This is the sixth consecutive month of contraction for the Manufacturing PMI following a 30-month period of expansion.
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Here’s the breakdown of the May PMI:
- New Orders Index: 42.6%, a 3.1 percentage point decrease month-over-month
- Production Index: 51.1%, a 2.2 percentage point increase month-over-month
- Prices Index: 44.2%, a 9 percentage point decrease month-over-month
- Backlog of Orders Index: 37.5%, a 5.6 percentage point decrease month-over-month
- Employment Index: 51.4%, a 1.2 percentage point increase month-over-month
- Supplier Deliveries Index: 43.5%, a 1.1 percentage point decrease month-over-month
- Inventories Index: 45.8%, a 0.5 percentage point decrease month-over-month
- New Export Orders Index: 50%, a 0.2 percentage point increase month-over-month
- Imports Index: 47.3%, a 2.6 percentage point decrease month-over-month
“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,” said Timothy R. Fiore, ISM Chairman.
Four manufacturing industries saw growth in May:
- Nonmetallic Mineral Products
- Furniture and Related Products
- Transportation Equipment
- Fabricated Metal Products
Wood Products; Primary Metals; Apparel, Leather & Allied Products; Textile Mills; Paper Products; Printing & Related Support Activities; Petroleum & Coal Products; Chemical Products; Food, Beverage & Tobacco Products; Computer & Electronic Products; Electrical Equipment, Appliances & Components; Plastics & Rubber Products; Miscellaneous Manufacturing; and Machinery, all reported a decrease in May.
