US manufacturing still constrained by bottlenecks in May
By Alexander Bueso
Date: Tuesday 01 Jun 2021
(Sharecast News) - Manufacturing activity in the US accelerated further last month, according to the results of one of the most closely-followed surveys for the sector.
The Institute for Supply Management's factory sector Purchasing Managers Index increased from April's reading of 60.7 to 61.2 for May.
Economists had penciled-in a reading of 61.0.
Firms continued to struggle to source the necessary inputs, as denoted by the increase in the sub-index for supplier deliveries from 75.0 to 78.8.
A sub-index for employment meanwhile slipped from 55.1 to 50.9.
New orders on the other hand continued to pile up, with the corresponding sub-index strengthening from 64.3 to 67.0.
The sub-index linked to the prices paid by firms dipped from 89.6 to 88.0.
"Stepping back from the month-to-month noise, the underlying story here is very clear. Demand is strong, because manufacturers' customers report record low inventories, but shortages of key parts - especially chips, but including others - and labor are constraining production," explained Ian Shepherdson, chief economist at Pantheon Macroeconomics.
"The production index has fallen by nearly 10 points in the past two months and is now 8.5 points below the orders index. As a result, order backlogs are at record highs and the supplier deliveries index is at a 47-year high."
Special promo:
Trading the Forex Market? Visit FXmania.com to get advanced infomation about currencies and the Foreign Exchange
Market.
Email this article to a friend
or share it with one of these popular networks:
You are here: news
10 Lower Thames St,
London EC3R 6EN