Following weakness seen in the regional manufacturing surveys, the May ISM manufacturing index stayed below 50 at 48.7 vs 49.2 in April and below the estimate of 49.5.
New orders were particularly weak, falling by 3.7 pts m/o/m to 45.4, the weakest in a year. ISM said, “Panelists indicated that the months of April and May experienced a slowing compared to the beginning of the year as housing, construction and capital expenditures activity continue to underperform.” Backlogs fell by 3 pts to just 42.4, the lowest since last November. There was little change with the inventory picture both at the manufacturing side and at customers as both came in below 50 at 47.9 and 48.3 respectively. Export orders rose 1.9 pts to back above 50 at 50.6 after falling by 2.9 pts last month. Supplier deliveries were unchanged at just under 50 while prices paid slipped by 3.9 pts to a still elevated 57, the 2nd highest read since the summer of 2022.
Employment was a positive, rising 2.5 pts to back above 50 for the first time since last September at 51.1. However, the ISM said this on the jobs picture, “Many Business Survey Committee respondents’ companies are continuing to reduce head counts through layoffs (which accounted for 38 percent of reduction activity, down from 50 percent in April), attrition and hiring freezes. Panelists’ comments in May indicated an increase in staff reductions compared to April.” 7 industries of 18 added staff vs 4 in April and 7 in March.
Keep reading with a 7-day free trial
Subscribe to The Boock Report to keep reading this post and get 7 days of free access to the full post archives.