The Institute of Supply Management (ISM) reported that the Purchasing Managers’ Index (PMI) increased slightly to 54.9 in May from 54.8 in April. So far every month of 2017 has had a higher index than any month of 2016. After contracting in August 2016, the manufacturing sector has expanded at a strong pace. PMI came in above expectations (54.6). The New Order Index increase by 2 points to 59.5. The Production Index fell by 1.5 points to 57.1. Of 18 manufacturing industries, 15 reported monthly growth in May.
After a slow start in January of 2014, PMI recovered, with a range of 54.3 to 58.1 for the balance of 2014. We did not see a reading above 53.9 in 2015, and that high mark was reached in January. In 2016, the index ranged from 48.2 (Jan) to 54.5 (Dec) but it was not a steady rise, with manufacturing contracting in February and August.
An index over 50 indicates growth while a PMI under 50 represents contraction in the manufacturing sector of the economy. The index reached a low of 32.5 in December 2008 but then recovered more quickly than most other areas of the economy.