US Non-Manufacturing Activity Grows Faster in May
The ISM Non-Manufacturing PMI for the United States rose to a three-month high of 56.9 in May 2019 from 55.5 in the previous month and above market expectations of 55.5. Business activity, new orders and employment all grew at a faster pace. Non Manufacturing PMI in the United States is reported by Institute for Supply Management.
The ISM Non-Manufacturing PMI for the United States rose to a three-month high of 56.9 in May 2019 from 55.5 in the previous month and above market expectations of 55.5.
Increases were seen in business activity (61.2 vs 59.5 in April), new orders (58.6 vs 58.1), and employment (58.1 vs 53.7), while new export orders growth slowed (55.5 vs 57.0) and imports were flat (50.0 vs 55.0). In addition, supplier deliveries dropped from the previous month (49.5 vs 50.5) and prices rose at softer pace (55.4 vs 55.7).
“According to the NMI, 16 non-manufacturing industries reported growth. The non-manufacturing sector continues to experience a slight uptick in business activity, but it is still leveling off overall. Respondents are mostly optimistic about overall business conditions, but concerns remain about tariffs and employment resources.
The 16 non-manufacturing industries reporting growth in May — listed in order — are: Accommodation & Food Services; Educational Services; Management of Companies & Support Services; Construction; Transportation & Warehousing; Real Estate, Rental & Leasing; Utilities; Wholesale Trade; Public Administration; Professional, Scientific & Technical Services; Mining; Health Care & Social Assistance; Other Services; Finance & Insurance; Information; and Retail Trade. The only industry reporting a decrease is Agriculture, Forestry, Fishing & Hunting.”
The ISM Manufacturing PMI in the US fell to 52.1 in May 2019 from 52.8 in the previous month, missing market expectations of 53. The latest reading pointed to weakest pace of expansion in the manufacturing sector since October 2016 as production growth eased to the weakest since August 2016 and backlog of orders contracted for the first time since January 2017. Business Confidence in the United States is reported by Institute for Supply Management.
The ISM Manufacturing PMI in the US fell to 52.1 in May 2019 from 52.8 in the previous month, missing market expectations of 53. The latest reading pointed to weakest pace of expansion in the manufacturing sector since October 2016.
The production index dropped 1 point to 51.3 in May, the lowest level since August 2016. In addition, other PMI components declined: the supplier deliveries index was down 2.6 points to 52; and the inventories index fell 2 points to 50.9. Meanwhile, increases were seen in new orders (up 1 point to 52.7), employment (up 1.3 points to 53.7), and prices (up 3.2 points to 53.2).
“Comments from the panel reflect continued expanding business strength, but at soft levels consistent with the early-2016 expansion. Demand expansion continued, with the New Orders Index strengthening, but remaining in the low 50s, the Customers’ Inventories Index remaining at a ‘too low’ level, and the Backlog of Orders Index contracting for the first time since January 2017. Consumption (production and employment) continued to expand, resulting in a combined PMI contribution of 0.3 percentage point. Inputs — expressed as supplier deliveries, inventories and imports — were lower this month, primarily due to inventory softening and supplier’s continuing to deliver faster, resulting in a combined 4.6-percentage point reduction in the Supplier Deliveries and Inventories indexes. Imports contracted for the second straight month. Overall, inputs reflect supply chains’ ability to respond faster and indicate that supply managers are closely watching inventories. Prices remain at a relatively stable level.
“Respondents expressed concern with the escalation in the U.S.-China trade standoff, but overall sentiment remained predominantly positive. The PMI continues to reflect slowing expansion,” says Fiore.
Of the 18 manufacturing industries, 11 reported growth in May, in the following order: Printing & Related Support Activities; Furniture & Related Products; Plastics & Rubber Products; Textile Mills; Miscellaneous Manufacturing; Electrical Equipment, Appliances & Components; Computer & Electronic Products; Chemical Products; Food, Beverage & Tobacco Products; Nonmetallic Mineral Products; and Machinery. The six industries reporting contraction in May — listed in order — are: Apparel, Leather & Allied Products; Primary Metals; Petroleum & Coal Products; Wood Products; Paper Products; and Fabricated Metal Products.