Manufacturing Sector Grows In May, But At A Slower Pace

The Institute for Supply Management’s index of U.S. manufacturing fell to 59.7 in May from 60.4 in April. The reading came in slightly higher than the decrease to 59.4 economists had expected, according to a Briefing.com consensus survey. Levels higher than 50 signal manufacturing growth, while readings below 50 indicate contraction.

May’s manufacturing activity was largely driven by an uptick in employment and continued strength in production and new orders, said ISM chairman Norbert Ore in a prepared statement. The slight slowdown in manufacturing growth from the previous month was due to a sharp decrease in inventory levels. ISM’s inventory index fell for a second consecutive month to 45.6 in May from 49.4 in April, with eight out of the 18 industries surveyed reporting drops in inventory.