Economic activity in the manufacturing sector expanded in May at a faster pace than in April, according to the Institute for Supply Management’s purchasing managers index for US manufacturing. And the panel of firms taking part in the report indicated production and employment continue to expand despite labor and skill shortages.

May’s index reading was 58.7, up from April’s reading of 57.3. Any reading above 50% generally indicates improving conditions.

The employment portion of the index also increased to a reading of 56.3, up from the April reading of 54.2.

“Comments from the panel reflect continued expanding business strength,” said Timothy Fiore, chair of the Institute for Supply Management manufacturing business survey committee. “Demand remains strong, with the New Orders Index at 60 or above for the 13th straight month, and the Customers’ Inventories Index remaining at very low levels. The Backlog of Orders Index continued expanding, with its highest reading since April 2004, when it registered 66.5%. Consumption, described as production and employment, continues to expand in spite of labor and skill shortages.”