| ISM: May Sees Component Shortages |
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| Written by Chelsey Drysdale | |||
| Tuesday, 01 June 2010 14:52 | |||
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TEMPE, AZ — Economic activity in the manufacturing sector expanded in May for the 10th consecutive month, says the Institute for Supply Management. The PMI for May was 59.7%, a drop of 70 basis points. A reading above 50% indicates the manufacturing economy is generally expanding. New orders were flat at 65.7%, and production was down 30 basis points to 66.6%. Inventories dropped 3.8 percentage points to 45.6%, while customer inventories dropped 1 percentage point to 32%. Backlogs were up 2 percentage points to 59.5%. “The manufacturing sector grew for the 10th consecutive month during May. The rate of growth as indicated by the PMI is driven by continued strength in new orders and production. Employment continues to grow, as manufacturers have added to payrolls for six consecutive months. The recovery continues to broaden, as 16 of 18 industries report growth. There are a number of reports, particularly in the tech sector, of shortages of components; this is the result of excessive inventory de-stocking during the downturn,” said ISM spokesperson Norbert J. Ore. The overall economy grew for the 13th consecutive month.
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