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Manufacturing growth accelerates in May

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Manufacturing growth accelerates in May

Widely-watched ISM report shows a rebound from dismal April.

According to a widely-followed index of manufacturing activity, the growth in US manufacturing rebounded in May.

Today, the Institute of Supply Management issued the results of its monthly national manufacturing survey for May, which indicated that manufacturing growth grew 1.3 percentage points during the month, increasing from 51.5% in April to 52.8%.  Both the March and April figures were the lowest since May of 2013.

"Employment also showed positive signs, with the Employment Index rising to 51.7%, 3.4 percentage points above the April reading of 48.3%, reflecting growing employment levels from April."

(A reading above 50% indicates growth.)

Analysts had expected a fall to 52.0%

The New Orders Index came in at 55.8%, an increase of 2.3 percentage points from the reading of 53.5 percent in April, while the Production Index fell to 54.5%, 1.5 percentage points below the April’s 56%.

Employment also showed positive signs, with the Employment Index rising to 51.7%, 3.4 percentage points above the April reading of 48.3%, reflecting growing employment levels from April.

The Prices Index rose to 49.5%, 9 percentage points above the April reading of 40.5%, indicating lower raw materials prices for the seventh consecutive month.

Bradley J. Holcomb, chair of the Institute for Supply Management Manufacturing Business Survey Committee, was upbeat about the report.

“Comments from the panel carry a positive tone in terms of an improving economy, increasing demand, and improving flow of goods through the West Coast ports. Also noted, however, are continuing concerns over the price of the US dollar and challenges affecting markets related to oil and gas industries."

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