TEMPE, AZ - New orders and backlogs for manufacturers grew for the 24th straight month in May - the longest stretch of growth in 16 years. But the rate of growth is losing momentum, according to the latest Institute for Supply Management figures, released this morning. The PMI measure of economic activity fell for the sixth straight, slipping 1.9 points sequentially to 51.4%, its lowest point since June 2003.

For the month new orders and backlogs were down 2.0 points and production slid 1.8 points. Inventories at manufacturers ticked down, but customer stock levels jumped six points.

Employment, at 48.8, failed to grow, ending a streak of 18 months.

The Electronic Components and Equipment sector reported growth during the month.

In a press statement, ISM chairman Norbert Ore questioned whether the improving dollar and high energy costs were to blame. "The manufacturing sector is definitely slowing, and the question is whether a somewhat stronger dollar and the burden of high energy costs are slowly bringing this manufacturing growth cycle to end."

                                     Jan.        Feb.      March April      May

PMI                              56.4        55.3      55.2     53.3        51.4

New orders                    56.5        55.8      57.1     53.7        51.7

Production                    57.8        56.7      56.5     56.7        54.9

Inventories                   52.8        48.6      54.1     47.9        47.8

Customer inventories    44.5        42.5      46.0     41.5        47.5

Backlogs                       50.5        50.5      56.0     53.0        51.0

Source: Institute for Supply Management, June 2005

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