Manufacturing economic growth remained on autopilot in May, the Institute for Supply Management (Tempe, AZ) said today.
The institute’s PMI, which measures economic activity in manufacturing, was 54.9% last month, a tick up from April’s 54.8%, according to a monthly report. May was the ninth consecutive month of expansion in manufacturing.
New orders, production and employment were all in positive territory last month, the group said.
The PMI is “still a very strong number,” Timothy R. Fiore, the new chair of ISM’s Manufacturing Business Survey Committee, said on a conference call.
Fifteen of 18 industries reported growth during the month, including machinery, primary metals, miscellaneous manufacturing, transportation equipment, fabricated metal products and petroleum and coal products. Two industries, apparel and textile mills, reported economic contraction.
The ISM report is based on a survey of 350 purchasing and supply executives. A reading above 50% indicates expansion and below 50% contraction. The PMI has averaged 53.9% the past 12 months and 56.1% for the first five months of 2017. The index hasn’t been below 50% since August.
‘Turn of a Dime’
The group’s New Orders Index perked up to 59.5% in May from 57.5% the month before. Fourteen of 18 industries reported increases in orders, including primary metals, machinery, fabricated metal products, petroleum and coal products and transportation equipment. Only apparel reported a decline in orders.
The institute’s Production Index cooled to 57.1% in May, down from 58.6% in April. Fourteen of 18 industries reported a boost in output, including primary metals, fabricated metal products, miscellaneous manufacturing, machinery and transportation equipment.
ISM’s Employment Index advanced to 53.5% last month, up from 52% in April. Eleven of 18 industries reported job growth, including miscellaneous manufacturing, machinery and petroleum and coal products. Five industries reported job cuts, including fabricated metal products and transportation equipment.
Fiore said the production and employment results may be tied together.
Some manufacturers are have difficulty “finding qualified people on a turn of a dime,” he said. “Our ability to staff up is impacting the production number.”