The overall economy grew for the seventy-second straight time, while the manufacturing sector expanded for the twenty-ninth consecutive month, the Institute for Supply Management reported Monday.
According to the ISM's monthly report on business, the ISM index increased to 52.8 in May from 51.5 in April.
Economists polled by Thomson Reuters predicted the index would rise to 52.0.
An index reading below 50 signals a slowing economy, while a level above 50 suggests expansion. A reading of 50 shows the sector was unchanged in the month.
The prices paid index rose to 49.5 from 40.5. The employment index grew to 51.7 from 48.3.
The production index slipped to 54.5 from 56.0, the new orders index grew to 55.8 from 53.5; the supplier deliveries index climbed to 50.7 from 50.1; the export orders index decreased to 50.0 from 51.5; and the imports index gained to 55.0 from 54.0.
The inventories index increased to 51.5 from 49.5; the customers' inventories index gained to 45.5 from 44.0; and backlog of orders rose to 53.5 from 49.5.
Respondents' comments included:
"Economy is showing signs of improvement." (Food, Beverage & Tobacco Products)
"Automotive is still strong. However, steel prices have dropped due to overcapacity and the strong US dollar." (Fabricated Metal Products)
"Overall business is steady. Employment in this area is up, a good sign." (Transportation Equipment)
"Strong spring demand in agriculture." (Chemical Products)
"The exchange rate on the dollar is hurting our sales in Asia. The conversion rate is lowering our profit in Europe where we sell in Euros." (Computer & Electronic Products)
"Sales are starting to stabilize and show improvement from prior months, Year to Date (YTD). Concerns still exist with the overall economy." (Apparel, Leather & Allied Products)
"Continued challenges in markets related to oil and gas industries." (Miscellaneous Manufacturing)
"Oversupply is continuing to tighten profit margins." (Wood Products)
"West Coast port issues have eased up and our incoming imports are flowing again." (Machinery)
"Chemicals pricing seems to have bottomed and is slowly rising again." (Plastics & Rubber Products)
