PMI shows growth for third straight month
Led by continued strength in new orders and production, the Institute for Supply Management’s (ISM) monthly Purchasing Manufacturers’ Index (PMI) continued its growth trend for the third straight month in May. The PMI reached 51.3%, an increase of 0.5 percentage points from April.
The PMI dipped below the 50% growth threshold in October 2015 and stayed there until a 51.8% reading in March. The increase in May’s Index also brought the 12-month average for the PMI to 50.3%, indicating slow but steady growth for the manufacturing sector.
The New Orders Index was down 0.1 percentage points in May, but still at a solid 55.7%. The Production Index also slid 1.6 percentage points, but the overall 52.6% reading also was solid. Prices for raw materials climbed for the third straight month, jumping 4.0 percentage points to 63.5%.
Members of the Institute for Supply Management’s Manufacturing Business Survey Committee generally were optimistic about the domestic and global outlook.
Among the comments:
- "Business conditions remain strong with the exception of South America. Continued expectation for a strong year even with the headwinds of currency and economic slowdown." (Food, Beverage & Tobacco Products)
- "Consistent sales growth in greater China, North Asia, Southeast Asia, Canada and Mexico. Flat for the Americas and Europe." (Chemical Products)
- "Slowdown in Chinese economy causing low orders." (Computer & Electronic Products)
- "Continued brisk order flow for our business." (Fabricated Metal Products)
- "Steady to slightly up production rates vs. prior month." (Machinery)
- "Business is still good, but slowing." (Transportation Equipment)
- "Business conditions are stable; demand is steady for our products." (Miscellaneous Manufacturing)
- "Our business remains to be strong, but many of my suppliers are telling me their business is flat." (Plastics & Rubber Products)
- "Oil & Gas continues to struggle to meet cost controls required in the new low-oil price environment." (Petroleum & Coal Products)
- "Market is improving steadily in both orders and pricing." (Wood Products)
The PMI passed another milestone in May’s report. By maintaining an Index level above 43.2%, which is the threshold for overall economic growth, May marked seven consecutive years of expansion in the U.S. economy.
Bob Vavra, content manager, Plant Engineering, CFE Media, email@example.com.