June 10, 2015
PMI Improves in May
Economic activity in the manufacturing sector expanded in May for the 29th consecutive month as the PMI jumped 1.3 percentage points to 52.8 percent, reports the Institute for Supply Management, Tempe, Ariz. A reading above 50 percent indicates expansion.
Other indicators also showed improvement from April. ISM’s New Orders Index registered 55.8 percent, an increase of 2.3 percentage points. The Employment Index registered 51.7 percent, up 3.4 percentage points. Inventories of raw materials registered 51.5 percent, an increase of 2 percentage points. The Prices Index registered 49.5 percent, 9 percentage points above the April reading, reflecting lower raw materials prices for the seventh consecutive month.
Of the 18 manufacturing industries polled, 14 reported growth in May, including primary metals and fabricated metal products.
Comments from respondents to ISM’s monthly survey of purchasing executives pointed to a growing economy, increasing demand and improving flow of goods through the West Coast ports. They also expressed concern over the strength of the U.S. dollar and challenges related to the struggling oil and gas market, reports Bradley J. Holcomb, chairman of ISM’s Manufacturing Business Survey Committee.
The average PMI for January through May of 52.4 percent corresponds to a 2.9 percent increase in real GDP on an annualized basis, according to ISM’s calculations.