Manufacturing sector growth losing momentum

Economic activity in the manufacturing sector grew in May for the 24th consecutive month, while the overall economy grew for the 43rd consecutive month, said the nation's supply executives in the latest Manufacturing ISM Report On Business®.

The report was issued today by Norbert J. Ore, C.P.M., chair of the Institute for Supply Management Manufacturing Business Survey Committee. "The manufacturing sector grew for the 24th consecutive month in May based on the ISM data. While this represents the longest period of growth in the last 16 years, the data also indicates that the sector is losing momentum, as this month's PMI is at the lowest level since June 2003, when it registered 50.4 percent. The rate of growth in New Orders continues to decline, and this month only 11 of 20 industries are reporting improvement when comparing May to April. The Employment Index failed to grow, ending 18 months of employment growth. The manufacturing sector is definitely slowing, and the question is whether a somewhat stronger dollar and the burden of high energy costs are slowly bringing this manufacturing growth cycle to end."

The 15 industries reporting growth in May—listed in order—are: petroleum; leather; wood and wood products; chemicals; food; rubber and plastic products; electronic components and equipment; industrial and commercial equipment and computers; instruments and photographic equipment; glass, stone, and aggregate; furniture; primary metals; textiles; transportation and equipment; and fabricated metals.

Primary metals was among the industries reporting New Order and Employment growth in May. Fabricated metals was among the industries reporting growth in Production.