Manufacturing activity in the US grew more than expected in May, reaching a four-year high.
“Elchi” reports that this was stated by “Reuters”, citing data from the Institute for Supply Management (ISM).
According to ISM data, the industrial business activity index (PMI, an indicator of activity in the sector) rose to 54.0 from 52.7 in April – this is the highest level since May 2022. A value above 50 indicates an increase in production. The sector has been growing for the fifth consecutive month, largely driven by investments in artificial intelligence.
The growth is linked to initial business orders amid shortages and price increases caused by the conflict with Iran and the closure of the Strait of Hormuz, which disrupted supplies and led to a rise in energy, aluminum, and fertilizer prices.
The new orders index rose from 54.1 to 56.8, and exports and unfilled orders also increased. The supplier deliveries index remained at 60.6, indicating slower logistics (a value above 50 means slower deliveries).
The raw materials price index fell from 84.6 to 82.1 but remains near the highs seen since April 2022. In April, inflation grew at its fastest pace in three years, reinforcing expectations that the Federal Reserve (Fed) will keep interest rates at 3.50-3.75% until at least next year.
Despite the increase in orders, employment in the industry remains weak: “The ISM employment index has recorded a decline for 32 consecutive months. Since January 2025, approximately 77,000 jobs have been lost in the sector.”