U.S. Manufacturing Expands as Supply Chain Pressures Rise
BIRMINGHAM, Mich. — U.S. manufacturing activity expanded in May at its fastest pace in four years as companies increased inventories ahead of potential supply disruptions and rising costs tied to the war with Iran, according to S&P Global data.
S&P Global’s flash U.S. manufacturing purchasing managers’ index rose to 55.3 in May from 54.5 in April, marking the strongest reading since May 2022. A reading above 50 indicates expansion.
The increase was driven largely by manufacturers building inventories to protect against possible shortages, higher prices and supply chain disruptions. Input inventories climbed to an 11-month high, while supplier delivery times worsened as companies accelerated purchasing activity.
S&P Global said factory input costs reached their highest level since June 2022, while manufacturers also raised output prices.
Manufacturing employment increased modestly.
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