Sharp, stronger improvement in US manufacturing conditions: May PMI
S&P Global purchasing managers’ index (PMI) data for May this year signalled a sharp and stronger improvement in US manufacturing conditions amid the sharpest upturn in production since April 2022.
New orders increased markedly again, but growth in both output and sales was in part driven by stock building as firms sought to protect themselves from supply chain disruption and steeply rising prices, caused primarily by the war in the Middle East, which remained a notable headwind for the sector.
Manufacturing input costs in the country rose at a rate unmatched in nearly four years, whilst supplier delivery times deteriorated to the greatest extent since August 2022, a release from S&P Global said.
S&P Global PMI data for May signalled a sharp and stronger improvement in US manufacturing conditions amid the sharpest upturn in production since April 2022.
New orders rose markedly again, manufacturing input costs rose at a rate unmatched in four years, confidence in the outlook softened since April and exports were a notable source of demand weakness, falling overall for the eleventh month in a row.
Confidence in the outlook also softened since April, though remained sufficiently positive to help explain a further rise in employment.
The seasonally-adjusted PMI for the country recorded 55.1 in May, up from 54.5 in the previous month, signalling a stronger rate of expansion in the manufacturing economy.
The latest index reading was the highest since May 2022 and has now posted above the critical 50 no-change mark for 10 successive months. The upturn in the PMI emanated in part from a stronger rise in production, with growth reaching the highest in just over four years, S&P Global noted.
Output growth was notably faster than new orders and rose sufficiently strongly for firms to add to their stocks of finished goods for the second successive month and at the quickest pace since last November. Overall new orders increased at a sharp pace, but softer than in April and largely driven by client efforts to build stock given expectations of further price rises and supply delays.
Exports were a notable source of demand weakness, falling overall for the eleventh month in a row.
Geopolitical instability and tariffs were reported to have weighed on foreign sales in the latest survey period. Rising raw material prices, particularly for fuel and oil-related products, pushed up input prices during May.
Input cost inflation increased from April to the highest since July 2022. Manufacturers’ own charges rose to the greatest extent since September 2022 as they sought to pass through their own higher expenses to clients wherever possible.
Purchasing activity rose solidly since April and was often linked to higher production requirements and efforts to mitigate against further price increases and supply chain disruption.
Subsequently, input stocks rose for the second successive month, with growth picking up to its highest since May 2025. That was despite difficulties sourcing and receiving inputs amid supply constraints and shipment delays from vendors. Overall, latest data revealed the most severe deterioration in vendor delivery times since August 2022.
May survey data signaled a renewed increase in staffing numbers. Although the rate of job creation was only modest, it was the best for five months.
A positive outlook in part helped encourage additional hiring, with manufacturers generally anticipating an increase in sales and output over the coming 12 months.
Fibre2Fashion News Desk (DS)
