TEMPE, AZ-U.S. manufacturing activity expanded for the 12th consecutive month, while the overall economy grew for the 31st consecutive month.
The Institute of Supply Management's PMI index, which measures manufacturing activity, rose to 62.8 in May from 62.4 in April. The latest figure was the highest since the index reached 63.6 in January, and was well above the 61.5 analysts had expected. An index reading above 50 indicates expansion. The gauge has been above 50 since June of last year.
"The manufacturing sector grew at a faster rate in May, continuing its recent strong performance," says Norbert J. Ore, chairman of the institute's Manufacturing Business Survey Committee and group director for strategic sourcing and procurement for Georgia-Pacific Corp. (Atlanta). "The rate of growth in new orders and production slowed slightly, but was offset by a significant increase in employment."
The institute's employment index showed growth for the seventh consecutive month, with a 61.9 reading in May. That's the highest it's been since the index reached 62.6 in April 1973. The employment reading in April of this year was 57.8. An employment index reading higher than 48 generally predicts an increase in manufacturing employment.