The May PMI Index—the Institute for Supply Management’s measurement of confidence among inventory purchasing managers—registered 53.5 percent during the month. Note: a PMI Index in excess of 42.5 percent, over a period of time, generally indicates an expansion of the overall economy. May’s PMI Index—although 6.9 percentage points lower than April’s figure—indicated economic activity in the manufacturing sector expanded in May for the 22nd consecutive month, with the overall economy growing for the 24th consecutive month.
Of the 18 manufacturing industries covered in the Institute for Supply Management’s survey, 14 reported growth in May, in the following order: Nonmetallic Mineral Products; Petroleum & Coal Products; Machinery; Transportation Equipment; Computer & Electronic Products; Textile Mills; Electrical Equipment, Appliances & Components; Primary Metals; Miscellaneous Manufacturing; Paper Products; Chemical Products; Plastics & Rubber Products; Apparel, Leather & Allied Products; and Fabricated Metal Products. The three industries reporting contraction in May are: Printing & Related Support Activities; Furniture & Related Products; and Food, Beverage & Tobacco Products.
While May’s PMI Index falls in the positive range, the trend over the past few months shows a deceleration in activity. “This month's index is the first reading below 60 percent for 2011, as well as the lowest PMI reported for the past 12 months,” said Bradley J. Holcomb, CPSM, CPSD, chair of the Institute for Supply Management™ Manufacturing Business Survey Committee. "Slower growth in new orders and production are the primary contributors to this month's lower PMI reading.”
The Institute for Supply Management’s New Orders Index registered 51 percent in May, a decrease of 10.7 percentage points when compared to the 61.7 percent reported in April. On the plus side, May represents the 23rd consecutive month of New Orders values over 52.1 percent. Note: A New Orders Index above 52 percent, over time, is generally consistent with an increase in the Census Bureau's series on manufacturing orders.
The Institute for Supply Management’s complete May 2011 Business Report is available online.