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Home Supply Management News & Reports ISM Reports ISM Report On Business® PMI
May
MANUFACTURING PMI® AT 48.7%
MAY 2024 MANUFACTURING ISM® REPORT ON BUSINESS®
NEW ORDERS AND BACKLOGS CONTRACTING
PRODUCTION AND EMPLOYMENT GROWING
SUPPLIER DELIVERIES FASTER
RAW MATERIALS INVENTORIES CONTRACTING; CUSTOMERS’ INVENTORIES TOO LOW
PRICES INCREASING; EXPORTS AND IMPORTS GROWING
(Tempe, Arizona) — Economic activity in the manufacturing sector contracted in
May for the second consecutive month and the 18th time in the last 19 months,
say the nation's supply executives in the latest Manufacturing ISM® Report On
Business®.
The report was issued today by Timothy R. Fiore, CPSM, C.P.M., Chair of the
Institute for Supply Management® (ISM®) Manufacturing Business Survey Committee:
“The Manufacturing PMI® registered 48.7 percent in May, down 0.5 percentage
point from the 49.2 percent recorded in April. The overall economy continued in
expansion for the 49th month after one month of contraction in April 2020. (A
Manufacturing PMI® above 42.5 percent, over a period of time, generally
indicates an expansion of the overall economy.) The New Orders Index remained in
contraction territory, registering 45.4 percent, 3.7 percentage points lower
than the 49.1 percent recorded in April. The May reading of the Production Index
(50.2 percent) is 1.1 percentage points lower than April’s figure of 51.3
percent. The Prices Index registered 57 percent, down 3.9 percentage points
compared to the reading of 60.9 percent in April. The Backlog of Orders Index
registered 42.4 percent, down 3 percentage points compared to the 45.4 percent
recorded in April. The Employment Index registered 51.1 percent, up 2.5
percentage points from April’s figure of 48.6 percent.
“The Supplier Deliveries Index figure of 48.9 percent equaled the reading
recorded in April. (Supplier Deliveries is the only ISM® Report On Business®
index that is inversed; a reading of above 50 percent indicates slower
deliveries, which is typical as the economy improves and customer demand
increases.) The Inventories Index registered 47.9 percent, down 0.3 percentage
point compared to April’s reading of 48.2 percent.
“The New Export Orders Index reading of 50.6 percent is 1.9 percentage points
higher than the 48.7 percent registered in April. The Imports Index continued in
expansion territory, registering 51.1 percent, 0.8 percentage point lower than
the 51.9 percent reported in April. During its current five-month streak in
expansion, the Imports Index has averaged 51.8 percent.”
Fiore continues, “U.S. manufacturing activity continued in contraction after
growing in March, the first expansion for the sector since September 2022.
Demand was soft again, output was stable, and inputs stayed accommodative.
Demand slowing was reflected by the (1) New Orders Index dropping deeper into
contraction, supported by additional comments regarding ‘softening,’ (2) New
Export Orders Index edging back into marginal expansion, (3) Backlog of Orders
Index regressing lower into contraction territory, and (4) Customers’
Inventories Index at the ‘just right’ level, neutral for future production.
Output (measured by the Production and Employment indexes) advanced compared to
April, with a combined 1.4-percentage point upward impact on the Manufacturing
PMI® calculation. Panelists’ companies maintained production levels month over
month, and head count reductions continued in May. Inputs — defined as supplier
deliveries, inventories, prices and imports — continued to accommodate future
demand growth. The Supplier Deliveries Index was stable, and the Inventories
Index was marginally lower compared to April. The Prices Index eased but
remained in strong expansion (or ‘increasing’) territory, as most commodity
driven costs continue to climb but at weaker rates. Imports continued to grow,
at a slower rate in May.
“Demand remains elusive as companies demonstrate an unwillingness to invest due
to current monetary policy and other conditions. These investments include
supplier order commitments, inventory building and capital expenditures.
Production execution continued to expand but was essentially flat compared to
the previous month. Suppliers continue to have capacity, with lead times
improving and shortages not as severe. Fifty-five percent of manufacturing gross
domestic product (GDP) contracted in May, up from 34 percent in April. More
importantly, the share of sector GDP registering a composite PMI® calculation at
or below 45 percent — a good barometer of overall manufacturing weakness — was 4
percent in May, the same as in April, but an indication of better health than
the 27 percent recorded in January. Among the top six industries by contribution
to manufacturing GDP in May, none had a PMI® at or below 45 percent,” says
Fiore.
The seven manufacturing industries reporting growth in May — in order — are:
Printing & Related Support Activities; Petroleum & Coal Products; Paper
Products; Textile Mills; Primary Metals; Fabricated Metal Products; and Chemical
Products. The seven industries reporting contraction in May — in the following
order — are: Wood Products; Plastics & Rubber Products; Machinery; Computer &
Electronic Products; Furniture & Related Products; Transportation Equipment; and
Food, Beverage & Tobacco Products.
WHAT RESPONDENTS ARE SAYING
* “Seems like a minor slowdown is happening. With less spending in the economy,
less pressure on us for our products.” [Chemical Products]
* “Business conditions are pacing with budget and forecast for 2024. Certain
markets are soft, but others are ahead of forecast, allowing us to maintain
overall. Concerns with the economy continue to drive business decisions.”
[Transportation Equipment]
* “Volume continues to be challenging, mostly due to inflationary impacts.”
[Food, Beverage & Tobacco Products]
* “Orders have started to rebound, but inventory levels remain high enough for
no impact on our supplier orders. It will take a few more strong months
before supplier orders are reactivated or increased.” [Computer & Electronic
Products]
* “Backlog is dwindling as we get caught up on orders; new orders are not
coming in as robust as the backlog is going down. Inflation continues to be a
problem with pricing of raw material and interest rates. We expect a flat
rest of calendar year 2024, especially given that it’s a presidential
election year.” [Machinery]
* “Export shipments continue to be soft as capital equipment sales remain lower
than forecast. As a result, production is also trending lower and inventory
that is not able to be pushed out is growing.” [Fabricated Metal Products]
* “Demand has been strong the first few months — ahead of budget, consistent
with last year. Bookings are starting to slow down for May and June. We are
monitoring this data closely to determine if it is a sign of decline or our
typical cyclical demand.” [Electrical Equipment, Appliances & Components]
* “Business is picking up, with incoming bookings increasing.” [Furniture &
Related Products]
* “Overall softening of markets for the month of June. Some impacts on a
regional basis with the continued weather in the northeast, south and
southeast regions. Delays in shipments continue across multiple regions.”
[Petroleum & Coal Products]
* “General concern about overall industry economics. Pricing weakness
continues, and we anticipate more headwinds in the coming months for spot
orders and inflation. Contract order book remains steady.” [Primary Metals]
MANUFACTURING AT A GLANCE
MAY 2024
Index Series Index May Series Index Apr Percentage Point Change Direction Rate
of Change Trend* (Months) Manufacturing PMI® 48.7 49.2 -0.5 Contracting Faster 2
New Orders 45.4 49.1 -3.7 Contracting Faster 2 Production 50.2 51.3 -1.1 Growing
Slower 3 Employment 51.1 48.6 +2.5 Growing From Contracting 1 Supplier
Deliveries 48.9 48.9 0.0 Faster Same 3 Inventories 47.9 48.2 -0.3 Contracting
Faster 16 Customers’ Inventories 48.3 47.8 +0.5 Too Low Slower 6 Prices 57.0
60.9 -3.9 Increasing Slower 5 Backlog of Orders 42.4 45.4 -3.0 Contracting
Faster 20 New Export Orders 50.6 48.7 +1.9 Growing From Contracting 1 Imports
51.1 51.9 -0.8 Growing Slower 5 OVERALL ECONOMY Growing Slower 49 Manufacturing
Sector Contracting Faster 2
MANUFACTURING ISM® REPORT ON BUSINESS® DATA IS SEASONALLY ADJUSTED FOR THE NEW
ORDERS, PRODUCTION, EMPLOYMENT AND INVENTORIES INDEXES.
*NUMBER OF MONTHS MOVING IN CURRENT DIRECTION.
COMMODITIES REPORTED UP/DOWN IN PRICE AND IN SHORT SUPPLY
COMMODITIES UP IN PRICE
--------------------------------------------------------------------------------
Aluminum (6); Brass; Copper (2); Diesel Fuel (3); Electrical Components;
Electronic Components; Labor — Temporary; Natural Gas; Ocean Freight; Plastic
Resins (5); Solvents (2); Steel Fabrications; and Zinc (2).
COMMODITIES DOWN IN PRICE
--------------------------------------------------------------------------------
Packaging Components; Steel; Steel — Carbon (2); Steel — Hot Rolled; and Steel —
Scrap.
COMMODITIES IN SHORT SUPPLY
--------------------------------------------------------------------------------
Electrical Components (44); Electrical Equipment (3); Electronic Components (2);
and Printed Circuit Board Assemblies (PCBA).
Note: The number of consecutive months the commodity is listed is indicated
after each item.
--------------------------------------------------------------------------------
MAY 2024 MANUFACTURING INDEX SUMMARIES
--------------------------------------------------------------------------------
MANUFACTURING PMI®
The U.S. manufacturing sector contracted for the second consecutive month in
May, as the Manufacturing PMI® registered 48.7 percent, down 0.5 percentage
point compared to April’s reading of 49.2 percent. “After breaking a 16-month
streak of contraction by expanding in March, the manufacturing sector has
contracted the last two months, and at a faster rate in May. Two out of five
subindexes that directly factor into the Manufacturing PMI® are in expansion
territory, up from one in April. The New Orders Index moved deeper into
contraction after one month of expansion in March. Of the six biggest
manufacturing industries, two (Fabricated Metal Products; and Chemical Products)
registered growth in May,” says Fiore. A reading above 50 percent indicates that
the manufacturing sector is generally expanding; below 50 percent indicates that
it is generally contracting.
A Manufacturing PMI® above 42.5 percent, over a period of time, generally
indicates an expansion of the overall economy. Therefore, the May Manufacturing
PMI® indicates the overall economy grew for the 49th straight month after one
month of contraction (April 2020). “The past relationship between the
Manufacturing PMI® and the overall economy indicates that the May reading (48.7
percent) corresponds to a change of plus-1.7 percent in real gross domestic
product (GDP) on an annualized basis,” says Fiore.
THE LAST 12 MONTHS
--------------------------------------------------------------------------------
Month Manufacturing PMI® May 2024 48.7 Apr 2024 49.2 Mar 2024 50.3 Feb 2024 47.8
Jan 2024 49.1 Dec 2023 47.1
Month Manufacturing PMI® Nov 2023 46.6 Oct 2023 46.9 Sep 2023 48.6 Aug 2023 47.6
Jul 2023 46.5 Jun 2023 46.4
Average for 12 months - 47.9
High - 50.3
Low - 46.4
NEW ORDERS
ISM®’s New Orders Index contracted in May for the second month, registering 45.4
percent, a decrease of 3.7 percentage points compared to April’s figure of 49.1
percent and the lowest reading since May 2023 (42.9 percent). The New Orders
Index hasn’t indicated consistent growth since a 24-month streak of expansion
ended in May 2022. “Of the six largest manufacturing sectors, one (Chemical
Products) reported increased new orders. Panelists indicated that the months of
April and May experienced a slowing compared to the beginning of the year as
housing, construction and capital expenditures activity continue to
underperform,” says Fiore. A New Orders Index above 52.3 percent, over time, is
generally consistent with an increase in the Census Bureau’s series on
manufacturing orders (in constant 2000 dollars).
The four manufacturing industries that reported growth in new orders in May are:
Printing & Related Support Activities; Petroleum & Coal Products; Miscellaneous
Manufacturing; and Chemical Products. The eight industries reporting a decline
in new orders in May — in the following order — are: Wood Products; Textile
Mills; Nonmetallic Mineral Products; Transportation Equipment; Electrical
Equipment, Appliances & Components; Fabricated Metal Products; Food, Beverage &
Tobacco Products; and Machinery.
New Orders % Higher % Same % Lower Net Index May 2024 19.0 57.4 23.6 -4.6 45.4
Apr 2024 19.9 63.2 16.9 +3.0 49.1 Mar 2024 26.1 57.7 16.2 +9.9 51.4 Feb 2024
24.4 58.2 17.4 +7.0 49.2
PRODUCTION
The Production Index pulled back slightly, but remained in expansion territory
in May, registering 50.2 percent, 1.1 percentage points lower than the April
reading of 51.3 percent. The Production Index has been in expansion in four of
the last five months. Of the six largest manufacturing sectors, two (Fabricated
Metal Products; and Chemical Products) reported increased production.
“Panelists’ companies marginally improved output levels compared to April. With
new order rates weak and backlog levels sagging to historical lows, maintaining
production output without growing intermediate goods and finished goods
inventory will be a challenge in June,” says Fiore. An index above 52.2 percent,
over time, is generally consistent with an increase in the Federal Reserve
Board’s Industrial Production figures.
The six industries reporting growth in production during the month of May, in
order, are: Petroleum & Coal Products; Printing & Related Support Activities;
Nonmetallic Mineral Products; Paper Products; Fabricated Metal Products; and
Chemical Products. The six industries reporting a decrease in production in May,
in order, are: Plastics & Rubber Products; Food, Beverage & Tobacco Products;
Transportation Equipment; Electrical Equipment, Appliances & Components;
Machinery; and Computer & Electronic Products.
Production % Higher % Same % Lower Net Index May 2024 19.8 62.6 17.6 +2.2 50.2
Apr 2024 22.1 62.6 15.3 +6.8 51.3 Mar 2024 25.3 61.7 13.0 +12.3 54.6 Feb 2024
18.0 64.8 17.2 +0.8 48.4
EMPLOYMENT
ISM®’s Employment Index registered 51.1 percent in May, 2.5 percentage points
higher than the April reading of 48.6 percent. “The index indicated employment
expanded after seven consecutive months of contraction. Of the six big
manufacturing sectors, three (Food, Beverage & Tobacco Products; Transportation
Equipment; and Chemical Products) expanded employment in May. Many Business
Survey Committee respondents’ companies are continuing to reduce head counts
through layoffs (which accounted for 38 percent of reduction activity, down from
50 percent in April), attrition and hiring freezes. Panelists’ comments in May
indicated an increase in staff reductions compared to April. The approximately
1-to-1 ratio of hiring versus reduction comments is consistent with activity
from November 2023 through March,” says Fiore. An Employment Index above 50.3
percent, over time, is generally consistent with an increase in the Bureau of
Labor Statistics (BLS) data on manufacturing employment.
Of 18 manufacturing industries, the seven industries reporting employment growth
in May — in the following order — are: Printing & Related Support Activities;
Petroleum & Coal Products; Nonmetallic Mineral Products; Food, Beverage &
Tobacco Products; Transportation Equipment; Primary Metals; and Chemical
Products. The six industries reporting a decrease in employment in May, in the
following order, are: Wood Products; Plastics & Rubber Products; Furniture &
Related Products; Computer & Electronic Products; Machinery; and Fabricated
Metal Products.
Employment % Higher % Same % Lower Net Index May 2024 17.1 69.0 13.9 +3.2 51.1
Apr 2024 16.3 67.9 15.8 +0.5 48.6 Mar 2024 14.1 67.8 18.1 -4.0 47.4 Feb 2024
10.9 70.5 18.6 -7.7 45.9
SUPPLIER DELIVERIES*
Delivery performance of suppliers to manufacturing organizations was faster in
May, with the Supplier Deliveries Index registering 48.9 percent, the same
reading reported in April. This is the third consecutive month of faster
deliveries after one month of slower performance preceded by 16 straight months
in “faster” territory. After a reading of 52.4 percent in September 2022, the
index went into contraction territory in October and remained there until
February. Of the six big industries, only one (Chemical Products) reported
slower supplier deliveries in May. “Suppliers continue to support their
customers adequately as suppliers deliver faster, make more reliable promises
and slowly reduce lead times. Panelists predict faster supplier deliveries
through the rest of 2024,” says Fiore. A reading below 50 percent indicates
faster deliveries, while a reading above 50 percent indicates slower deliveries.
The six manufacturing industries reporting slower supplier deliveries in May, in
order, are: Textile Mills; Petroleum & Coal Products; Primary Metals; Paper
Products; Electrical Equipment, Appliances & Components; and Chemical Products.
The seven industries reporting faster supplier deliveries in May — in the
following order — are: Wood Products; Machinery; Fabricated Metal Products;
Plastics & Rubber Products; Food, Beverage & Tobacco Products; Computer &
Electronic Products; and Transportation Equipment.
Supplier Deliveries % Slower % Same % Faster Net Index May 2024 6.2 85.3 8.5
-2.3 48.9 Apr 2024 8.1 81.6 10.3 -2.2 48.9 Mar 2024 9.0 81.7 9.3 -0.3 49.9 Feb
2024 8.9 82.4 8.7 +0.2 50.1
INVENTORIES
The Inventories Index registered 47.9 percent in May, down 0.3 percentage point
compared to the reading of 48.2 reported in April. “Manufacturing inventories
contracted at a slightly faster rate compared to the previous month. Of the six
big industries, two (Fabricated Metal Products; and Food, Beverage & Tobacco
Products) increased manufacturing inventories in May. Due to demand uncertainty,
panelists’ companies are showing caution in inventory investment, relying more
on suppliers to carry inventory ‘on demand.’ This caution likely extends to more
acute management of accounts payable and accounts receivable activities,” says
Fiore. An Inventories Index greater than 44.4 percent, over time, is generally
consistent with expansion in the Bureau of Economic Analysis (BEA) figures on
overall manufacturing inventories (in chained 2000 dollars).
Of 18 manufacturing industries, six reported higher inventories in May, in the
following order: Paper Products; Textile Mills; Wood Products; Fabricated Metal
Products; Electrical Equipment, Appliances & Components; and Food, Beverage &
Tobacco Products. The nine industries reporting lower inventories in May — in
the following order — are: Computer & Electronic Products; Petroleum & Coal
Products; Nonmetallic Mineral Products; Furniture & Related Products; Machinery;
Miscellaneous Manufacturing; Plastics & Rubber Products; Primary Metals; and
Chemical Products.
Inventories % Higher % Same % Lower Net Index May 2024 14.4 66.4 19.2 -4.8 47.9
Apr 2024 13.1 67.7 19.2 -6.1 48.2 Mar 2024 16.0 66.2 17.8 -1.8 48.2 Feb 2024
12.7 70.4 16.9 -4.2 45.3
CUSTOMERS' INVENTORIES*
ISM®’s Customers’ Inventories Index registered 48.3 percent in May, up 0.5
percentage point compared to the 47.8 percent reported in April. “Customers’
inventory levels decreased at a slower rate in May, with the index moving upward
in ‘about right’ territory. For the second month, panelists report their
companies’ customers have sufficient amounts of their products in inventory,
which is considered neutral for future new orders and production,” says Fiore.
The six industries reporting customers’ inventories as too high in May, in
order, are: Printing & Related Support Activities; Textile Mills; Wood Products;
Computer & Electronic Products; Miscellaneous Manufacturing; and Plastics &
Rubber Products. The seven industries reporting customers’ inventories as too
low in May, in order, are: Nonmetallic Mineral Products; Primary Metals;
Petroleum & Coal Products; Furniture & Related Products; Machinery; Electrical
Equipment, Appliances & Components; and Chemical Products.
Customers' Inventories % Reporting % Too High % About Right % Too Low Net Index
May 2024 75 14.8 66.9 18.3 -3.5 48.3 Apr 2024 76 15.6 64.3 20.1 -4.5 47.8 Mar
2024 75 8.9 70.2 20.9 -12.0 44.0 Feb 2024 77 10.9 69.7 19.4 -8.5 45.8
PRICES*
The ISM® Prices Index registered 57 percent, 3.9 percentage points lower
compared to the April reading of 60.9 percent, indicating raw materials prices
increased in May for the fifth month after eight consecutive months of
decreases. Of the six largest manufacturing industries, five — Machinery;
Chemical Products; Computer & Electronic Products; Food, Beverage & Tobacco
Products; and Fabricated Metal Products — reported price increases in May. “The
Prices Index indicated strong expansion in May, but also easing compared to the
previous month. Commodity prices continue to increase, especially fuel, natural
gas, aluminum and plastics. Steel is showing signs of weakness. Twenty-six
percent of companies reported higher prices in May, compared to 31 percent in
April,” says Fiore. A Prices Index above 52.8 percent, over time, is generally
consistent with an increase in the Bureau of Labor Statistics (BLS) Producer
Price Index for Intermediate Materials.
In May, the 12 industries that reported paying increased prices for raw
materials, in order, are: Primary Metals; Textile Mills; Paper Products;
Printing & Related Support Activities; Electrical Equipment, Appliances &
Components; Plastics & Rubber Products; Machinery; Chemical Products; Computer &
Electronic Products; Miscellaneous Manufacturing; Food, Beverage & Tobacco
Products; and Fabricated Metal Products. The three industries reporting paying
decreased prices for raw materials in May are: Petroleum & Coal Products;
Nonmetallic Mineral Products; and Transportation Equipment.
Prices % Higher % Same % Lower Net Index May 2024 25.5 63.0 11.5 +14.0 57.0 Apr
2024 30.8 60.1 9.1 +21.7 60.9 Mar 2024 23.6 64.4 12.0 +11.6 55.8 Feb 2024 18.3
68.3 13.4 +4.9 52.5
BACKLOG OF ORDERS*
ISM®’s Backlog of Orders Index registered 42.4 percent, down 3 percentage points
from the 45.4 percent reported in April, indicating order backlogs contracted
for the 20th consecutive month after a 27-month period of expansion. Only one of
the six largest manufacturing industries (Chemical Products) reported expanded
order backlogs in May. “The index remained in contraction in May, as new order
rates were insufficient to allow backlogs to grow,” says Fiore.
Of 18 manufacturing industries, the four that reported growth in order backlogs
in May are: Textile Mills; Paper Products; Primary Metals; and Chemical
Products. The nine industries reporting lower backlogs in May — in the following
order — are: Wood Products; Electrical Equipment, Appliances & Components;
Computer & Electronic Products; Machinery; Transportation Equipment; Furniture &
Related Products; Food, Beverage & Tobacco Products; Miscellaneous
Manufacturing; and Fabricated Metal Products.
Backlog of Orders % Reporting % Higher % Same % Lower Net Index May 2024 91 12.3
60.1 27.6 -15.3 42.4 Apr 2024 90 12.2 66.4 21.4 -9.2 45.4 Mar 2024 92 14.8 62.9
22.3 -7.5 46.3 Feb 2024 93 14.9 62.8 22.3 -7.4 46.3
NEW EXPORT ORDERS*
ISM®’s New Export Orders Index registered 50.6 percent in May, up 1.9 percentage
points from April’s reading of 48.7 percent. “The New Export Orders Index
reading indicates that export orders expanded slightly in May after one month of
contraction and two straight months of expansion before that. Panelists’
comments continue to support marginal improvement in demand from overseas
customers,” says Fiore.
The four industries reporting growth in new export orders in May are: Wood
Products; Chemical Products; Food, Beverage & Tobacco Products; and Computer &
Electronic Products. The six industries reporting a decrease in new export
orders in May — in the following order — are: Paper Products; Furniture &
Related Products; Plastics & Rubber Products; Primary Metals; Transportation
Equipment; and Machinery. Seven industries reported no change in exports in May.
New Export Orders % Reporting % Higher % Same % Lower Net Index May 2024 72 10.0
81.1 8.9 +1.1 50.6 Apr 2024 74 9.7 78.0 12.3 -2.6 48.7 Mar 2024 76 12.2 78.8 9.0
+3.2 51.6 Feb 2024 71 12.0 79.2 8.8 +3.2 51.6
IMPORTS*
ISM®’s Imports Index registered 51.1 percent in May, cooling somewhat with a
decrease of 0.8 percentage point compared to April’s reading of 51.9 percent.
“Imports grew for the fifth consecutive month after contracting for 14
consecutive months. Respondent companies continue to increase on-hand
inventories cautiously, as future growth prospects remain cloudy. Ocean freight
costs continue to rise as a result of extended transit times, reducing available
container and ship availability,” says Fiore.
The eight industries reporting an increase in import volumes in May — listed in
the following order — are: Printing & Related Support Activities; Textile Mills;
Paper Products; Petroleum & Coal Products; Primary Metals; Food, Beverage &
Tobacco Products; Fabricated Metal Products; and Transportation Equipment. The
seven industries that reported lower volumes of imports in May, in order, are:
Wood Products; Nonmetallic Mineral Products; Furniture & Related Products;
Miscellaneous Manufacturing; Electrical Equipment, Appliances & Components;
Computer & Electronic Products; and Chemical Products.
Imports % Reporting % Higher % Same % Lower Net Index May 2024 85 14.8 72.6 12.6
+2.2 51.1 Apr 2024 85 11.6 80.6 7.8 +3.8 51.9 Mar 2024 84 12.5 80.9 6.6 +5.9
53.0 Feb 2024 83 14.0 77.9 8.1 +5.9 53.0
*THE SUPPLIER DELIVERIES, CUSTOMERS' INVENTORIES, PRICES, BACKLOG OF ORDERS, NEW
EXPORT ORDERS AND IMPORTS INDEXES DO NOT MEET THE ACCEPTED CRITERIA FOR SEASONAL
ADJUSTMENTS.
BUYING POLICY
The average commitment lead time for Capital Expenditures in May was 172 days,
an increase of two days compared to April. Average lead time in May for
Production Materials was 80 days, an increase of one day. Average lead time for
Maintenance, Repair and Operating (MRO) Supplies was 44 days, the same as in
April.
PERCENT REPORTING
Capital Expenditures Hand-to-Mouth 30 Days 60 Days 90 Days 6 Months 1 Year +
Average Days May 2024 15 3 9 15 32 26 172 Apr 2024 17 4 8 13 32 26 170 Mar 2024
14 5 9 13 31 28 176 Feb 2024 14 5 7 14 32 28 177
PERCENT REPORTING
Production Materials Hand-to-Mouth 30 Days 60 Days 90 Days 6 Months 1 Year +
Average Days May 2024 6 26 31 23 10 4 80 Apr 2024 7 23 29 30 7 4 79 Mar 2024 8
22 31 28 7 4 78 Feb 2024 9 25 26 25 11 4 80
PERCENT REPORTING
MRO Supplies Hand-to-Mouth 30 Days 60 Days 90 Days 6 Months 1 Year + Average
Days May 2024 29 38 15 13 4 1 44 Apr 2024 29 37 17 12 4 1 44 Mar 2024 25 40 18
12 5 0 44 Feb 2024 29 36 19 11 5 0 43
ABOUT THIS REPORT
--------------------------------------------------------------------------------
DO NOT CONFUSE THIS NATIONAL REPORT with the various regional purchasing reports
released across the country. The national report’s information reflects the
entire U.S., while the regional reports contain primarily regional data from
their local vicinities. Also, the information in the regional reports is not
used in calculating the results of the national report. The information compiled
in this report is for the month of May 2024.
The data presented herein is obtained from a survey of manufacturing supply
executives based on information they have collected within their respective
organizations. ISM® makes no representation, other than that stated within this
release, regarding the individual company data collection procedures. The data
should be compared to all other economic data sources when used in
decision-making.
DATA AND METHOD OF PRESENTATION
--------------------------------------------------------------------------------
The Manufacturing ISM® Report On Business® is based on data compiled from
purchasing and supply executives nationwide. The composition of the
Manufacturing Business Survey Committee is stratified according to the North
American Industry Classification System (NAICS) and each of the following
NAICS-based industries’ contribution to gross domestic product (GDP): Food,
Beverage & Tobacco Products; Textile Mills; Apparel, Leather & Allied Products;
Wood Products; Paper Products; Printing & Related Support Activities; Petroleum
& Coal Products; Chemical Products; Plastics & Rubber Products; Nonmetallic
Mineral Products; Primary Metals; Fabricated Metal Products; Machinery; Computer
& Electronic Products; Electrical Equipment, Appliances & Components;
Transportation Equipment; Furniture & Related Products; and Miscellaneous
Manufacturing (products such as medical equipment and supplies, jewelry,
sporting goods, toys and office supplies). The data are weighted based on each
industry’s contribution to GDP. According to BEA estimates (the average of the
fourth quarter 2022 GDP estimate and the GDP estimates for first, second, and
third quarter 2023, as released on December 21, 2023), the six largest
manufacturing industries are: Chemical Products; Transportation Equipment; Food,
Beverage & Tobacco Products; Computer & Electronic Products; Machinery; and
Fabricated Metal Products.
Survey responses reflect the change, if any, in the current month compared to
the previous month. For each of the indicators measured (New Orders, Backlog of
Orders, New Export Orders, Imports, Production, Supplier Deliveries,
Inventories, Customers’ Inventories, Employment and Prices), this report shows
the percentage reporting each response, the net difference between the number of
responses in the positive economic direction (higher, better and slower for
Supplier Deliveries) and the negative economic direction (lower, worse and
faster for Supplier Deliveries), and the diffusion index. Responses are raw data
and are never changed. The diffusion index includes the percent of positive
responses plus one-half of those responding the same (considered positive).
The resulting single index number for those meeting the criteria for seasonal
adjustments (Manufacturing PMI®, New Orders, Production, Employment and
Inventories) is then seasonally adjusted to allow for the effects of repetitive
intra-year variations resulting primarily from normal differences in weather
conditions, various institutional arrangements, and differences attributable to
non-moveable holidays. All seasonal adjustment factors are subject annually to
relatively minor changes when conditions warrant them. The Manufacturing PMI® is
a composite index based on the diffusion indexes of five of the indexes with
equal weights: New Orders (seasonally adjusted), Production (seasonally
adjusted), Employment (seasonally adjusted), Supplier Deliveries, and
Inventories (seasonally adjusted).
Diffusion indexes have the properties of leading indicators and are convenient
summary measures showing the prevailing direction of change and the scope of
change. A Manufacturing PMI® reading above 50 percent indicates that the
manufacturing economy is generally expanding; below 50 percent indicates that it
is generally declining. A Manufacturing PMI® above 42.5 percent, over a period
of time, indicates that the overall economy, or gross domestic product (GDP), is
generally expanding; below 42.5 percent, it is generally declining. The distance
from 50 percent or 42.5 percent is indicative of the extent of the expansion or
decline. With some of the indicators within this report, ISM® has indicated the
departure point between expansion and decline of comparable government series,
as determined by regression analysis. The Manufacturing ISM® Report On Business®
survey is sent out to Manufacturing Business Survey Committee respondents the
first part of each month. Respondents are asked to report on information for the
current month for U.S. operations only. ISM® receives survey responses
throughout most of any given month, with the majority of respondents generally
waiting until late in the month to submit responses to give the most accurate
picture of current business activity. ISM® then compiles the report for release
on the first business day of the following month.
The industries reporting growth, as indicated in the Manufacturing ISM® Report
On Business® monthly report, are listed in the order of most growth to least
growth. For the industries reporting contraction or decreases, those are listed
in the order of the highest level of contraction/decrease to the least level of
contraction/decrease.
Responses to Buying Policy reflect the percent reporting the current month’s
lead time, the approximate weighted number of days ahead for which commitments
are made for Capital Expenditures; Production Materials; and Maintenance, Repair
and Operating (MRO) Supplies, expressed as hand-to-mouth (five days), 30 days,
60 days, 90 days, six months (180 days), a year or more (360 days), and the
weighted average number of days. These responses are raw data, never revised,
and not seasonally adjusted.
ISM ROB CONTENT
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ABOUT INSTITUTE FOR SUPPLY MANAGEMENT® (ISM®)
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Institute for Supply Management® (ISM®) is the first and leading not-for-profit
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