US PMI data reveals solid manufacturing performance in May

Posted on 5 Jun 2015 by Tim Brown
US PMI data reveals strong manufacturing performance in May - image courtesy of Trading Economics and Markit Economics
US PMI data for May 2015 reveals strong manufacturing performance in May - image courtesy of Trading Economics and Markit Economics

Economic activity in the manufacturing sector expanded in May for the 29th consecutive month, and the overall economy grew for the 72nd consecutive month, according to the latest PMI figures.

The US PMI data compiled for the Institute for Supply Management, which represents purchasing managers, rose to 52.8 in May, up from 51.5 in April. A figure above 50 indicates expansion.

Consumer spending, a large driver of the US economy, was however unchanged in April.

The report, issued last week, showed the New Orders Index registered 55.8, an increase of 2.3% from the reading of 53.5 in April but the Production Index registered 54.5, down 1.5% from the April reading of 56.

The Employment Index registered 51.7, 3.4% above the April reading of 48.3, reflecting growing employment levels from April.

Inventories of raw materials registered 51.5, an increase of 2% from the April reading of 49.5 percent while the Prices Index registered 49.5, a total of 9% above April’s 40.5, indicating lower raw materials prices for the seventh consecutive month.

Of the 18 manufacturing industries, 14 reported growth in May in the following order: Apparel, Leather & Allied Products; Furniture & Related Products; Paper Products; Food, Beverage & Tobacco Products; Nonmetallic Mineral Products; Plastics & Rubber Products; Electrical Equipment, Appliances & Components; Primary Metals; Transportation Equipment; Printing & Related Support Activities; Fabricated Metal Products; Machinery; Miscellaneous Manufacturing; and Chemical Products.

The two industries which reported contraction according the the May US PMI data were: Textile Mills; and Computer & Electronic Products.

Adjusted for seasonal influences, the HSBC Mexico Manufacturing PMI registered 53.3 in May, down slightly from 53.8 in April and the lowest reading for seven months. However, the headline index has now remained above the neutral 50.0 threshold for 20 months running and the latest reading was broadly in line with the average since the survey began in 2011 (53.4).

Commenting on the Mexico Manufacturing PMI survey, Tim Moore, Senior Economist at Markit said: “Mexico’s manufacturing sector continued to expand at a solid pace in May, helped by new export orders rising at one of the fastest rates seen over the past three years. However, domestic demand has slipped down to a more subdued growth path, which contributed to the slowest overall improvement in business conditions since last October.

“Looking ahead, manufacturers appear confident about the business outlook, with employment numbers rising again during May, while survey respondents also widely commented on sustained capital investment growth and associated plans to boost capacity at their plants.”