Economic activity in the manufacturing sector grew for the fourth consecutive month in May,
according to a report from the Institute of Supply Management, formerly the National Association of Purchasing Management.
ISM’s Manufacturing Index rose from 53.9 in April to 55.7 in May, while the New Orders Index rose from 59 in April to 63.1 in May, and the Production Index rose from 58 in April to 58.5 in May.
This suggests a pickup in the pace of the recovery in May after a brief slowing in April, say Newport Communications Senior Economist Jim Haughey.
“All components of the index strengthened in May, with the orders components rising more than measures of current activity,” he says.
The overall orders index also jumped 6.9% and export orders were up 2.7%. Haughey says they were boosted by a depreciating dollar and improving economies abroad.
He notes the import orders sub-index fell 3.8%, saying “Usually this would signal a weaker domestic economy, but in May it simply reflects higher import prices with a weaker dollar.”
The current activity indexes rose slightly, with production up 0.9% and employment 1.3%.
“This unusually large gain for employment probably reflects an improving business outlook more than it does added jobs,” Haughey says.
The one downside contained in the report is the price index, which rose during May.
Of the 20 industries in the manufacturing sector, 18 industries reported growth during May: petroleum; textiles; rubber & plastic products; transportation & equipment; furniture; glass, stone & aggregate; instruments & photographic equipment; primary metals; wood & wood products; fabricated metals; electronic components & equipment; tobacco; paper; chemicals; printing & publishing; food; industrial & commercial equipment & computers; and apparel.