Manufacturing slumped in May
June 3, 2011
Manufacturing has seen a revival in the U.S. over recent months and years, but the sector took a step back in May. MarketWatch reports that one of the leading manufacturing indicators fell sharply last month.
The Institute for Supply Management produces its monthly manufacturing gauge by surveying sales of numerous manufacturers. In March of this year, the measure reached a seven-year high showing 61.4 percent of companies reported growth. That rate plummeted nearly 7 points to 53.5 percent in May, after dipping slightly in April to 60.4 percent.
Before reaching its peak in March, U.S. manufacturing had risen consistently for 22 months as companies reorganized in the wake of the 2008 financial crisis. However, the ISM notes that some of the recent rise in sales likely stemmed from companies replenishing stocks following the recent slowdown. As stocks return to normal levels, manufacturing orders begin to taper off.
"We all expected a slowdown," Cliff Waldman, an economist with Manufacturers Alliance, told the publication. "The business climate for manufacturing is starting to weaken. You don't want to overstate one month, but this was a whopper."
A separate ISM survey earlier last month, however, found that many manufacturers were anticipating a strong upcoming market, according to Bloomberg. Overall expected sales growth was bumped up to 7.5 percent from the December forecast of 5.6 percent.