Economic activity in the manufacturing sector expanded in May for the 34th consecutive month, and the overall economy grew for the 36th consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business.

The report was issued by Bradley J. Holcomb, CPSM, CPSD, chair of the Institute for Supply Management Manufacturing Business Survey Committee.
 
The PMI registered 53.5 percent, a modest decrease of 1.3 percentage points from April's reading of 54.8 percent, indicating expansion in the manufacturing sector for the 34th consecutive month.  A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.

The New Orders Index continued its growth trend for the 37th consecutive month, registering 60.1 percent in May. This represents an increase of 1.9 percentage points from April and also the highest level recorded by the index since April 2011. The Prices Index for raw materials fell to 47.5 percent in May, dropping 13.5 percentage points from April, indicating lower prices for the first time since December 2011. Comments from the panel generally reflect stable-to-strong orders, with sales showing steady improvement over the first five months of 2012."

Performance by Industry

Of the 18 manufacturing industries, 13 are reporting growth in May, in the following order:

• Nonmetallic Mineral Products
• Furniture & Related Products
• Apparel, Leather & Allied Products
• Miscellaneous Manufacturing
• Primary Metals
• Electrical Equipment, Appliances & Components
• Fabricated Metal Products
• Machinery
• Textile Mills
• Paper Products
• Computer & Electronic Products
• Printing & Related Support Activities
• Chemical Products

The four industries reporting contraction in May are:

• Plastics & Rubber Products
• Petroleum & Coal Products
• Food, Beverage & Tobacco Products
• Transportation Equipment

What Respondents are Saying

• "Business has been trending moderately higher since the beginning of the year. [We] anticipate 5 percent to 7 percent growth for the year." (Chemical Products)
• "Sales were stronger than expected; customers are waiting until the last minute to place orders." (Machinery)
• "We are having the best year in sales volume and profit since mid-2008." (Fabricated Metal Products)
• "Business seems to be holding steady." (Miscellaneous Manufacturing)
• "We had modest growth across most of our businesses, with stable raw materials [prices] and improved schedules and efficiency in our operations." (Textile Mills)
• "Business is lower than forecast for Q2 2012." (Computer & Electronic Products)
• "We are seeing overall steady improvements, month over month and year over year." (Apparel, Leather & Allied Products)
• "Business is steady." (Food, Beverage & Tobacco Products)
• "While not quite as busy as last month, production is steady and year over year still much better." (Transportation Equipment)
• "Business continues to be up in general." (Furniture & Related Products)

Read the full May 2012 Manufacturing ISM Report On Business.