The overall economy grew for the eighty-fourth straight time, while the manufacturing sector expanded for the third month in a row, the Institute for Supply Management reported Monday.
According to the ISM's monthly report on business, the ISM index increased to 51.3 in May from 50.8 in April.
Economists polled by Thomson Reuters predicted the index would be 50.6.
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 gained to 63.5 from 59.0. The employment index remained at 49.2.
The production index dropped to 52.6 from 54.2, the new orders index fell to 55.7 from 55.8; the supplier deliveries index gained to 54.1 from 49.1; the export orders index held at 52.5; and the imports index stayed at 50.0.
The inventories index decreased to 45.0 from 45.5; the customers' inventories index rose to 50.0 from 46.0; and backlog of orders slid to 47.0 from 50.5.
Respondents' comments included:
- "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)
