Manufacturing PMI Snaps Skid With Modest May Increase

After falling for three straight months, the latest Manufacturing PMI from the Institute for Supply Management increased by 1.4 points in May.

TEMPE, AZ — Economic activity in the manufacturing sector expanded in May, and the overall economy grew for the 109th consecutive month, say the nation’s supply executives in the latest Manufacturing ISM Report On Business.

The report was issued Friday by Timothy R. Fiore, CPSM, C.P.M., Chair of the Institute for Supply Management (ISM) Manufacturing Business Survey Committee:

  • The May PMI registered 58.7 percent, an increase of 1.4 percentage points from the April reading of 57.3 percent
  • The New Orders Index registered 63.7 percent, an increase of 2.5 percentage points from the April reading of 61.2 percent
  • The Production Index registered 61.5 percent, a 4.3 percentage point increase compared to the April reading of 57.2 percent
  • The Employment Index registered 56.3 percent, an increase of 2.1 percentage points from the April reading of 54.2 percent
  • The Supplier Deliveries Index registered 62 percent, a 0.9 percentage point increase from the April reading of 61.1 percent
  • The Inventories Index registered 50.2 percent, a decrease of 2.7 percentage points from the April reading of 52.9 percent
  • The Prices Index registered 79.5 percent in May, a 0.2 percentage point increase from the April reading of 79.3 percent, indicating higher raw materials prices for the 27th consecutive month

Comments from the panel reflect continued expanding business strength. Demand remains strong, with the New Orders Index at 60 or above for the 13th straight month, and the Customers’ Inventories Index remaining at very low levels. The Backlog of Orders Index continued expanding, with its highest reading since April 2004, when it registered 66.5 percent. Consumption, described as production and employment, continues to expand in spite of labor and skill shortages. Inputs, expressed as supplier deliveries, inventories and imports, had expansion declines, due primarily to inventory reductions likely caused by supplier performance issues. Lead-time extensions, steel and aluminum disruptions, supplier labor issues, and transportation difficulties continue. Export orders expanded at slower rates. The Prices Index is at its highest level since April 2011, when it registered 82.6 percent. Demand remains robust, but the nation’s employment resources and supply chains continue to struggle. Respondents say price pressure at their companies is causing price-increase discussions as we prepare to enter H2.”

Of the 18 manufacturing industries, 16 reported growth in May, in the following order: Textile Mills; Nonmetallic Mineral Products; Electrical Equipment, Appliances & Components; Printing & Related Support Activities; Fabricated Metal Products; Furniture & Related Products; Machinery; Chemical Products; Food, Beverage & Tobacco Products; Computer & Electronic Products; Petroleum & Coal Products; Plastics & Rubber Products; Miscellaneous Manufacturing; Transportation Equipment; Paper Products; and Primary Metals. No industry reported a decrease in PMI in May compared to April.


Index Series Index May Series Index Apr Percentage Point Change Direction Rate of Change Trend* (Months)
PMI® 58.7 57.3 +1.4 Growing Faster 21
New Orders 63.7 61.2 +2.5 Growing Faster 29
Production 61.5 57.2 +4.3 Growing Faster 21
Employment 56.3 54.2 +2.1 Growing Faster 20
Supplier Deliveries 62.0 61.1 +0.9 Slowing Faster 20
Inventories 50.2 52.9 -2.7 Growing Slower 5
Customers’ Inventories 39.6 44.3 -4.7 Too Low Faster 20
Prices 79.5 79.3 +0.2 Increasing Faster 27
Backlog of Orders 63.5 62.0 +1.5 Growing Faster 16
New Export Orders 55.6 57.7 -2.1 Growing Slower 27
Imports 54.1 57.8 -3.7 Growing Slower 16
OVERALL ECONOMY Growing Faster 109
Manufacturing Sector Growing Faster 21

Manufacturing ISM® Report On Business® data is seasonally adjusted for the New Orders, Production, Employment and Supplier Deliveries Indexes.
*Number of months moving in current direction.


Month PMI®
May 2018 58.7
Apr 2018 57.3
Mar 2018 59.3
Feb 2018 60.8
Jan 2018 59.1
Dec 2017 59.3
Nov 2017 58.2
Oct 2017 58.5
Sep 2017 60.2
Aug 2017 59.3
Jul 2017 56.5
Jun 2017 56.7

12-month average: 58.7
High: 60.8   Low: 56.6