National, local manufacturing companies report continued growth in most sectors, report says
The United States’ manufacturing sector had its 10th consecutive month of expansion, according to the May Manufacturing ISM (Institute for Supply Management) Report on Business.
“The rate of growth as indicated by the PMI is driven by the continued strength in new orders and production,” said Norbert Ore, chair of the ISM Manufacturing Business Survey Committee. “Employment continues to grow as manufacturers have added to payrolls for six consecutive months. There are a number of reports, particularly in the tech sector, of shortages of components; this is the result of excessive inventory de-stocking during the downturn.”
Sixteen of 18 manufacturing industries reported gains in May. Top rankers included paper products, wood products, transportation equipment, electrical equipment, appliances and components, and fabricated metal products. The only industry that reported a contraction in May was petroleum and coal products.
Surveyed companies reported that new orders, production, employment, supplier deliveries, order backlogs, exports and imports were increasing. Inventories contracted, while customers reported too low inventories, the report states. As a result, prices increased in May.
According to the May ISM report, the nation’s manufacturing sector had a 59.7 percent PMI – a PMI of more than 50 percent indicates that the manufacturing economy is expanding. The April PMI was 60.4. The national PMI has been above 50 percent since August, 2009.
“The past relationship between the PMI and the overall economy indicates that the average PMI for January through May (58.9 percent) corresponds to a 5.7 percent increase in real gross domestic product,” Ore said. “In addition, if the PMI for May (59.7 percent) is annualized, it corresponds to a 6 percent increase in real GDP annually.”
Although Milwaukee’s industrial economy cooled slightly in May, it has continued to show improvement, according to the ISM-Milwaukee’s May business survey.
The institute’s seasonally adjusted index went down a point to 65 in May. Any reading over 50 indicates expansion. A year ago, the index was at 43.
The index indicated rates of slightly declining growth in new orders received, production, blue collar employment, white collar employment and prices paid. Supplier lead times remained unchanged.
Inventory levels rose, as did capital equipment purchases.