A report from
the Institute for Supply Management (ISM) revealed on Monday the U.S.
manufacturing sector’s activity contracted in May at a faster
pace than in the previous month.
The ISM's index
of manufacturing activity - the manufacturing PMI - checked in at 48.7 per cent
in May, down 0.5 percentage point from
an unrevised April reading of 49.2 per cent.
The May reading indicated that economic activity in the manufacturing sector shrank
for the second straight month and at a steeper pace than in the previous month.
Economists had predicted
the indicator to rise to 49.6 per cent.
According to
the report, the New Orders Index plunged 3.7 percentage points to 45.4 per cent
last month, the lowest level since May 2023 (42.9 per cent). The Production Index declined 1.1 percentage points to 50.2 per
cent but remained in growth territory. Meanwhile,
the Employment Index climbed 2.5 percentage points to 51.1 per cent, indicating that employment
expanded in May after seven consecutive months of decline. The Supplier
Deliveries Index held steady at 48.9 per cent, marking the third successive month of quicker
deliveries after one month of slower performance. Elsewhere, the Inventories Index slipped 0.3 percentage point to 47.9 per cent, suggesting manufacturing inventories contracted at a slightly faster rate compared to the previous month. On the price front, the Prices Index fell 3.9 percentage points
to 57.0 per cent, indicating raw materials prices rose in May for the fifth
month after eight consecutive months of decreases.