Tuesday, June 1, 2010

ISM Manufacturing Index Shows Expansion for 10th Consecutive Month

In May, the Institute for Supply Management's Manufacturing Index fell back slightly, falling 0.7 point to 59.7. Despite the decline, the index remains well above the expansionary threshold of 50. Therefore, the change over the month represents a slower rate of manufacturing sector activity growth, not an output decline. This was the tenth consecutive month where the index was in expansionary territory. The recovery of manufacturing continues to be robust.

It was the inventories component which drove most of the top line decline, which fell back 3.8 points to 45.6. This was the second consecutive month where the inventory component has been below the expansionary threshold. This is perhaps indicative that the inventory readjustment period of the past couple quarters is coming to an end.

The production component fell 0.3 point to 66.6, while the new orders component remained the same at 65.7. Employment continued to improve, increasing 1.3 points to 59.8.

Source: Institute of Supply Management

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