The overall economy grew for the sixtieth straight time, while the manufacturing sector expanded for the twelfth consecutive month, the Institute for Supply Management reported Monday.
According to the ISM's monthly report on business, the ISM index climbed to 55.4 in May from 54.9 in April.
Economists polled by Thomson Reuters predicted the index would rise to 55.5.
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 increased to 60.0 from 56.5. The employment index fell to 52.8 from 54.7.
The production index increased to 61.0 from 55.7, the new orders index rose to 56.9 from 55.1; the supplier deliveries index fell to 53.2 from 55.9; the export orders index slipped to 56.5 from 57.0; and the imports index declined to 54.5 from 58.0.
The inventories index held at 53.0; the customers' inventories index grew to 46.5 from 42.0; and backlog of orders decreased to 52.5 from 55.5.
Respondents' comments included:
"Increasing demand for product is creating supply and sourcing challenges." (Food, Beverage & Tobacco Products)
"Steel bars required for automotive applications are in high demand. Supply is very tight and prices are increasing." (Fabricated Metal Products)
"Aviation is recovering and outlook is optimistic." (Transportation Equipment)
"The improving gas prices are positively impacting our short term drilling plans." (Petroleum & Coal Products)
"Political issues in Russia are not yet impacting our supply of raw materials from Russian suppliers." (Computer & Electronic Products)
"Volumes picking up in some sectors, but profitability still elusive. Suppliers indicate similar difficulties in getting price increases." (Chemical Products)
"Business has remained steady. However, this month has a more subdued disposition by comparison.
Price escalation has leveled off with even a few decreases on selected items." (Wood Products)
"Semiconductor, oil & gas are very busy." (Electrical Equipment, Appliances & Components)
"Business slightly up as anticipated; holding." (Machinery)
"Defense industry contracts are shrinking, customer is exercising minimum options, or less than minimum." (Miscellaneous Manufacturing)
