×

US manufacturing index holds steady in May; construction spending tumbles 1.4% in April

  • The U.S. manufacturing index inched slightly higher, hitting 54.9, in May, new data show on Thursday.
  • This implies the overall manufacturing economy grew for the 96th consecutive month.
  • In other news, U.S. construction fell in April by the largest amount in a year, the Commerce Department has announced.

The U.S. manufacturing index inched slightly higher, hitting 54.9, in May, the Institute for Supply Management, or ISM, announced on Thursday.

This, as manufacturers show continued signs of making gains amid times of economic growth both domestically and abroad.

Economists had expected the closely watched index to slip to 54.5, according to a Thomson Reuters consensus estimate. ISM's index last stood at 54.8 in April.

This implies the overall manufacturing economy grew for the 96th consecutive month.

"Comments from the panel generally reflect stable to growing business conditions, with new orders, employment and inventories of raw materials all growing in May compared to April," Timothy Fiore, chair of ISM's business survey committee, said in a statement.

"The slowing of pricing pressure, especially in basic commodities, should have a positive impact on margins and buying policies as this moderation moves up the value chain."

Of the 18 manufacturing industries surveyed for this report, 15 reported growth in May — including furniture; plastics and rubber products; machinery; and food, beverage and tobacco products.

The group's new orders index registered 59.5 percent for the month, an increase of 2 percentage points.

Meanwhile, the production index stood at 57.1 percent, a 1.5 percentage points decrease compared to the April reading of 58.6 percent. Employment added 1.5 points to 53.5.

"Sales have picked up compared to the last two months ... Customer demand has increased," a respondent from the plastics and rubber products sector said.

A reading above 50 percent in this survey indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.

U.S. construction spending

In other news, U.S. construction fell in April by the largest amount in a year.

The Commerce Department announced Thursday that spending in the construction sector fell 1.4 percent for the month, the biggest drop since a 2.9 percent fall a year ago.

Construction spending was forecast to have grown 0.5 percentage points in April, after falling 0.2 percentage points in March.

The drop reflects significant weaknesses in home building, non-residential construction and government projects.