US Factory Activity Growth Edges Up In May: ISM
The Institute for Supply Management’s Manufacturing PMI in the US edged up to 54.9 in May of 2017 from 54.8 in April, beating expectations of 54.5. New orders, employment and inventories went up, offsetting slower growth in production.
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Increases were seen for new orders (2 to 59.5), employment (1.5 to 53.5) and inventories (0.5 to 51.5) while prices eased (-8 to 60.5). On the other hand, slowdowns were seen for production (-1.5 to 57.1), supplier devliveries (-2 to 53.1), new export orders (-2 to 57.5) and backlogs of orders (-2 to 55).
Of the 18 manufacturing industries, 15 reported growth in May in the following order: Nonmetallic Mineral Products; Furniture & Related Products; Plastics & Rubber Products; Machinery; Primary Metals; Food, Beverage & Tobacco Products; Electrical Equipment, Appliances & Components; Paper Products; Miscellaneous Manufacturing; Computer & Electronic Products; Transportation Equipment; Chemical Products; Fabricated Metal Products; Petroleum & Coal Products; and Printing & Related Support Activities. Two industries reported contraction in May compared to April: Apparel, Leather & Allied Products; and Textile Mills.
Comments from the panel generally reflect stable to growing business conditions, with new orders, employment and inventories of raw materials all growing in May compared to April. The slowing of pricing pressure, especially in basic commodities, should have a positive impact on margins and buying policies as this moderation moves up the value chain.