US manufacturing sector contracts in May for 2nd month

By Ovunc Kutlu

ISTANBUL (AA) - The US manufacturing sector contracted in May for the second consecutive month, according to a report released Monday by the Institute for Supply Management (ISM).

The ISM manufacturing purchasing managers' index (PMI) came in at 48.7% in May – down 0.5 percentage point from 49.2% recorded in April.

The market expectation for the index, based on replies from purchasing and supply executives in more than 400 industrial firms, was to come in at 49.8%. While a reading above 50 indicates growth, below that level shows contraction.

The figure also marked the 18th contraction in the last 19 months.

"U.S. manufacturing activity continued in contraction after growing in March, the first expansion for the sector since September 2022," said Timothy Fiore, chair of the ISM Manufacturing Business Survey Committee. "Demand was soft again, output was stable, and inputs stayed accommodative."

"Demand remains elusive as companies demonstrate an unwillingness to invest due to current monetary policy and other conditions," he added, and noted that 55% of manufacturing gross domestic product contracted in May, up from 34% in April.