May’s negative economic activity in manufacturing tells us what we already know

The Institute for Supply Management numbers for May’s economic activity in the manufacturing sector are in and it ain’t pretty, folks. But the ISM’s report tells us what most of us who watch the manufacturing sector already know: the rumor of a manufacturing recovery is just that – a rumor.

The Purchasing Managers’ Index (PMI) registered 49%, a decrease of 1.7% from April, finally falling below the benchmark of 50 (a number above 50 shows an expansion; a number below 50 indicates a contraction in manufacturing economic activity). The 12-month average PMI is a paltry 51.1%, with a high of 54.2% in February offering a glimmer of hope, and a low of 49.9% in the election month of November 2012.

“This month’s PMI reading is at its lowest level since June 2009, when it registered 45.8%,” commented Bradley J. Holcomb, CPSM, CPSD, chair of the Institute for Supply Management. “The new Orders Index decreased in May by 3.5% to 48.8%, and the Production Index decreased by 4.9% to 48.6%.”...

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