S&P Global US Manufacturing PMI™: Modest Improvement in May

The May S&P Global US Manufacturing PMI™ rose to 51.3 from 50.0 in April, indicating a modest improvement in the health of the manufacturing sector for the fourth time in the past five months. The latest reading was higher than the forecasted reading of 50.9.

Here is an excerpt from Andrew Harker, Economics Director at S&P Global Market Intelligence, in the latest press release:

“It was pleasing to see new orders return to growth in May following a blip in April. Although modest, the expansion in new work bodes well for production in the coming months. In fact, manufacturers cited confidence in the future as a factor contributing to increases in employment, purchasing activity and finished goods stocks.

“Cost pressures continued to build, however, with inflation on that front the strongest in just over a year. Although output prices rose at a slower pace in May, this is unlikely to be sustainable should cost burdens ramp up further in the months ahead.”

Background on the S&P Global US Manufacturing PMI

The S&P Global US Manufacturing PMI™ measures the activity level of purchasing mangers in the manufacturing sector through a questionnaire of ~800 manufacturers. The reported headline number is a weighted average of New Orders, Output, Employment, Suppliers' Delivery Time, and Stocks of Purchases. The S&P Manufacturing PMI is a diffusion index, meaning that a reading above 50 indicates expansion in the sector and a reading below 50 indicates contraction.