NEW YORK - The overall economy grew for the thirteenth straight time after seven months of contraction, while the manufacturing sector expanded for the tenth time after eighteenth months of contraction, the Institute for Supply Management reported this morning.
According to the ISM’s monthly report on business, the ISM index dipped to 59.7 in May from 60.4 in April.
Economists polled by Thomson Reuters predicted the index would fall to 59.0.
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 manufacturing sector grew for the 10th consecutive month during May," said Norbert J. Ore, chair of the Institute of Supply Management's manufacturing business survey committee. “The rate of growth as indicated by the PMI is driven by continued strength in new orders and production. Employment continues to grow as manufacturers have added to payrolls for six consecutive months. The recovery continues to broaden as 16 of 18 industries report growth. There are a number of reports, particularly in the tech sector, of shortages of components; this is the result of excessive inventory de-stocking during the downturn.”
The closely watched prices paid index fell to 77.5 from 78.0. The employment index was at 59.8, up from 58.5 the prior month.
The production index decreased to 66.6 from 66.9, the new orders index held at 65.7; the supplier deliveries index slipped to 61.0 from 61.3; the export orders index increased to 62.0 from 61.0; and the imports index fell to 56.5 from 58.0.
The inventories index dropped to 45.6 from 49.4; the customers’ inventories index fell to 32.0 from 33.0; and backlog of orders climbed to 59.5 from 57.5.
Respondents’ comments included:
"Tight supply conditions exist for electronic components." (Computer & Electronic Products)
"No signs of the ramp-up abating anytime soon." (Machinery)
"Volatility of steel and steel-making components is forcing us to raise prices on our shipped goods to automotive customers." (Fabricated Metal Products)
"Aftermarket sales increased 25 percent during the past quarter." (Transportation Equipment)
"Sales exceeded budget for the fourth consecutive month." (Food, Beverage & Tobacco Products)
