NEW YORK – The overall economy grew for the thirty-sixth straight time, while the manufacturing sector expanded for the thirty-fourth time, the Institute for Supply Management reported Friday.

According to the ISM’s monthly report on business, the ISM index slipped to 53.5 in May from 54.8 in April.

Economists polled by Thomson Reuters predicted the index would slip to 54.0.

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 PMI registered 53.5 percent, a modest decrease of 1.3 percentage points from April's reading of 54.8 percent, indicating expansion in the manufacturing sector for the 34th consecutive month," said Bradley Holcomb, chair of the Institute of Supply Management's manufacturing business survey committee. “The PMI registered 53.5 percent, a modest decrease of 1.3 percentage points from April's reading of 54.8 percent, indicating expansion in the manufacturing sector for the 34th consecutive month.”

The closely watched prices paid index slumped to 47.5 from 61.0. The employment index was at 56.9, down from 56.1 the prior month.

The production index decreased to 55.6 from 61.0, the new orders index grew to 60.1 from 58.2; the supplier deliveries index dipped to 48.7 from 49.2; the export orders index declined to 53.5 from 59.0; and the imports index remained 53.5 from 53.5.

The inventories index slid to 46.0 from 48.5; the customers’ inventories index fell to 43.5 from 45.5; and backlog of orders dropped to 47.0 from 49.5.

Respondents’ comments included:

“Business has been trending moderately higher since the beginning of the year. [We] anticipate 5 percent to 7 percent growth for the year.” (Chemical Products)

“Sales were stronger than expected; customers are waiting until the last minute to place orders.” (Machinery)

“We are having the best year in sales volume and profit since mid-2008.” (Fabricated Metal Products)

“Business seems to be holding steady.” (Miscellaneous Manufacturing)

“We had modest growth across most of our businesses, with stable raw materials [prices] and improved schedules and efficiency in our operations.” (Textile Mills)

“Business is lower than forecast for Q2 2012.” (Computer & Electronic Products)

“We are seeing overall steady improvements, month over month and year over year.” (Apparel, Leather & Allied Products)

“Business is steady.” (Food, Beverage & Tobacco Products)

“While not quite as busy as last month, production is steady and year over year still much better.” (Transportation Equipment)

“Business continues to be up in general.” (Furniture & Related Products)

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