Preliminary 52.3Prior 50.2Final S&P global manufacturing PMI for May 52.0
From Chris Williamson, Chief Business Economist at S&P
Global Market Intelligence
“The rise in the PMI during May masks worrying
developments under the hood of the US manufacturing
economy. While growth of new orders picked up and
suppliers were reportedly busier as companies built
up their inventory levels at an unprecedented rate, the
common theme was a temporary surge in demand as
manufacturers and their customers worry about supply
issues and rising prices.
“These concerns were not without basis: supplier
delays have risen to the highest since October 2022,
and incidences of price hikes are at their highest since
November 2022, blamed in most cases on tariffs.
Smaller firms, and those in consumer facing markets,
appear worst hit so far by the impact of tariffs on supply
and prices.
“Encouragingly, manufacturers regained some optimism
in May after sentiment had been hit hard by tariff
announcements in April, partly reflecting the pauses
on new levies. However, uncertainty clearly remains
elevated amid the fluid tariff environment, and factories
have so far shown a reluctance to expand headcounts in
the face of such volatility.”
The details from S&P GLobal:
Headline PMI Data
PMI: 52.0 in May (up from 50.2 in March and April)
Best reading since February; indicates solid growth in the manufacturing sector
🔹 New Orders
Rose to the strongest level in 3 months
Domestic demand was the primary driver
Export sales remained weak; only slight recovery after April’s sharp fall
Clients were front-running tariffs, placing orders early
🔹 Input Inventories
Record-high increase in input inventories (largest in 18 years of data)
Stockpiling driven by concerns over tariffs and supply chain disruption
🔹 Production & Output
Production volumes trimmed slightly for third straight month
Backlogs of work continued to fall modestly
Firms had sufficient capacity to meet demand
🔹 Employment
Employment rose for the first time in 3 months
Growth was marginal due to difficulty finding qualified workers
🔹 Prices
Input price inflation remained high, though eased to a 3-month low
Tariffs cited as key reason for cost increases; suppliers passed costs on
Factory gate prices (output charges) rose at the fastest pace since Nov 2022
🔹 Supply Chains
Supplier delivery delays worsened to the worst level since Oct 2022
Delays linked to stock shortages and tariff-related disruptions
🔹 Finished Goods Inventories
Rose in May for the first time since November
🔹 Business Confidence
Outlook improved to a 3-month high
Optimism driven by expectations that tariff-related disruptions may ease within a year
This article was written by Greg Michalowski at www.forexlive.com.