US manufacturers stepped up activity in May as new orders rushed in, a key industry survey showed today, allaying fears the US economic recovery may stall.
The Institute for Supply Management (ISM) purchasing managers' index - based on a survey of supply executives - climbed 1.8 points from the previous month to a two-year, four-month high of 55.7.
'May was a good month for manufacturing,' ISM said in a statement. New orders improved in 16 industries. 'This should help establish momentum in the sector that will carry forward into the third quarter,' it added.
It was the fourth straight month the purchasing managers' index (PMI) had registered above 50 points, the theoretical dividing line between expansion and contraction. The new orders index rose to 63.1 points from 59.0. The production index climbed to 58.5 from 58.
The ISM pointed to a broader-based, early-cycle rise in US industry rather than a very high growth rate in a narrow breadth of industries, economists said. The figures added to a picture of a strengthening US industrial heartland after data last week showed orders for goods rolling out of US factories leapt by a stronger-than-expected 1.2% in April.
Among other data contained in the index, the employment index rose to 47.3 points in May from 46.7 in April, indicating a contracting jobs market for the 20th consecutive month, albeit at a milder pace of deterioration. Inventories rose to 45.6 points from 42.9 in April.
The prices index rose to 63 points in May from 60.3, the third consecutive monthly rise. The backlog of orders index rose to 56.5 in May from 56. And the new export index climbed to 53.3 from 51.9.
