The Industrial Supply Association's June Economic Indicator Report showed that May growth slowed for both distributors and manufacturers for a second straight month, though expansion continued.
The ISA Distributor Index had a sharp drop from 64.2 in April to 56.6 in May, while the Manufacturer Index declined from 56.6 to 50.7. The Distributor Index reading was its lowest since December 2014 (55.2).
For each index, a reading above 50 percent indicates expansion, while a reading below 50 percent indicates contraction. The Indexes have been above 50 percent since December 2012.
Meanwhile, ISM's Purchasing Manufacturers Index rose from 51.5 to 52.8.
"While all individual indexes dropped too, business conditions and new orders for June are expected to be better for manufacturers – distributors continue to be pessimistic about next month, too," ISA said.