From the Institute for Supply Management (bolds are mine; most paragraphs breaks added by me):
Economic activity in the manufacturing sector expanded in May for the third consecutive month, while the overall economy grew for the 84th consecutive month, say the nation’s supply executives in the latest Manufacturing ISM® Report On Business®.
… The May PMI® registered 51.3 percent, an increase of 0.5 percentage point from the April reading of 50.8 percent.
The New Orders Index registered 55.7 percent, a decrease of 0.1 percentage point from the April reading of 55.8 percent. The Production Index registered 52.6 percent, 1.6 percentage points lower than the April reading of 54.2 percent.
The Employment Index registered 49.2 percent, the same reading as in April. Inventories of raw materials registered 45 percent, a decrease of 0.5 percentage point from the April reading of 45.5 percent.
The Prices Index registered 63.5 percent, an increase of 4.5 percentage points from the April reading of 59 percent, indicating higher raw materials prices for the third consecutive month.
Manufacturing registered growth in May for the third consecutive month, as 14 of our 18 industries reported an increase in new orders in May (down from 15 in April), and 12 of our 18 industries reported an increase in production in May (down from 15 in April).
Of the 18 manufacturing industries, 12 are reporting growth in May in the following order: Wood Products; Textile Mills; Printing & Related Support Activities; Fabricated Metal Products; Paper Products; Plastics & Rubber Products; Computer & Electronic Products; Miscellaneous Manufacturing; Electrical Equipment, Appliances & Components; Food, Beverage & Tobacco Products; Machinery; and Primary Metals. The six industries reporting contraction in May — listed in order — are: Apparel, Leather & Allied Products; Petroleum & Coal Products; Transportation Equipment; Nonmetallic Mineral Products; Chemical Products; and Furniture & Related Products.
Though the GDP drivers of Production and New Orders were positive, Backlog of Orders, declining from 50.5 percent to 47.0 percent, fell into contraction.
Most telling comment:
“Our business remains to be strong, but many of my suppliers are telling me their business is flat.” (Plastics & Rubber Products)
I believe, as I wrote in February, that those “many suppliers” aren’t among those filling out ISM’s surveys — which is why the group’s index is positive while the economy sheds manufacturing jobs (down a net 25,000 in the past two reported months), while regional surveys (e.g., Richmond, Dallas, New York) remain decidedly negative, and while the separate Markit report today tells us that “for those looking for a rebound in the economy after the lacklustre start to the year, the deteriorating trend in manufacturing is not going to provide any comfort.”