Economic activity in the US manufacturing sector contracted at a faster rate in May compared to the previous month, according to the Institute for Supply Management’s Manufacturing ISM Report on Business, released today.

The Manufacturing PMI fell to a reading of 46.9% in May from 47.1% recorded in April.

Readings below 50% indicate that the manufacturing economy is contracting.

“This is the seventh month of contraction and continuation of a downward trend that began in June 2022,” said Timothy Fiore, chair of the Institute for Supply Management Manufacturing Business Survey Committee.

“Of the five subindexes that directly factor into the Manufacturing PMI, two (production and employment) are in growth territory; however, these positive gains were offset by larger losses in the other three (new orders, supplier deliveries and inventories).”

The measure of employment, however, expanded to 51.4% in May, up from April’s reading of 50.2%. It indicates employment expanded again after two months of contraction.

“Of the six big manufacturing sectors, two (transportation equipment and machinery) expanded. For the third straight month, labor management sentiment at panelists’ companies reflects near parity between hiring and reducing staff,” Fiore said.

The Manufacturing PMI is based on data compiled from purchasing and supply executives across the US.