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PMI Declines Again in May

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Economic activity in the manufacturing sector contracted in May for the seventh consecutive month, the Institute for Supply Management reported. The PMI for May was 46.9 percent, 0.2 percentage points lower than April.

“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 Fiore, chair of the ISM's Manufacturing Business Survey Committee.

There were mixed results in other key indices. The New Orders Index dropped 3.1 percentage points to 42.6 percent and the Backlog of Orders Index fell 5.6 percentage points to 37.5 percent. On the other hand, the Production Index increased 2.2 percentage points to 51.1 percent and the Employment Index was up 1.2 percentage points to 51.4 percent.

“Of the six biggest manufacturing industries, only transportation equipment registered growth in May. Fabricated metal products was one of three other industries reporting growth in May.

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