Manufacturing PMI® at 56.1%; May 2022 Manufacturing ISM® Report On Business®

New Orders, Production and Backlogs Growing at Faster Rates; Employment Contracting; Supplier Deliveries Slowing at a Slower Rate; Raw Materials Inventories Growing at a Faster Rate; Customers' Inventories Too Low; Prices Increasing at a Slower Rate; Exports Growing at a Faster Rate; Imports Contracting; Record-Long Lead Times for Capital Expenditures

TEMPE, Ariz., June 1, 2022 /PRNewswire/ -- Economic activity in the manufacturing sector grew in May, with the overall economy achieving a 24th consecutive month of growth, say the nation's supply executives in the latest Manufacturing ISM^® Report On Business^®.

The report was issued today by Timothy R. Fiore, CPSM, C.P.M., Chair of the Institute for Supply Management^® (ISM^®) Manufacturing Business Survey Committee:

"The May Manufacturing PMI^® registered 56.1 percent, an increase of 0.7 percentage point from the reading of 55.4 percent in April. This figure indicates expansion in the overall economy for the 24th month in a row after a contraction in April and May 2020. This is the second-lowest Manufacturing PMI^® reading since September 2020, when it registered 55.4 percent. The New Orders Index reading of 55.1 percent is 1.6 percentage points higher than the 53.5 percent recorded in April. The Production Index reading of 54.2 percent is a 0.6-percentage point increase compared to April's figure of 53.6 percent. The Prices Index registered 82.2 percent, down 2.4 percentage points compared to the April figure of 84.6 percent. The Backlog of Orders Index registered 58.7 percent, 2.7 percentage points higher than the April reading of 56 percent. The Employment Index went into contraction territory at 49.6 percent, 1.3 percentage points lower than the 50.9 percent recorded in April. The Supplier Deliveries Index reading of 65.7 percent is 1.5 percentage points lower than the April figure of 67.2 percent. The Inventories Index registered 55.9 percent, 4.3 percentage points higher than the April reading of 51.6 percent. The New Export Orders Index reading of 52.9 percent is up 0.2 percentage point compared to April's figure of 52.7 percent. The Imports Index fell into contraction territory, decreasing 2.7 percentage points to 48.7 percent from 51.4 percent in April."

Fiore continues, "The U.S. manufacturing sector remains in a demand-driven, supply chain-constrained environment. Despite the Employment Index contracting in May, companies improved their progress on addressing moderate-term labor shortages at all tiers of the supply chain, according to Business Survey Committee respondents' comments. Panelists reported slightly lower rates of quits compared to April. May was a second straight month of slight easing of prices expansion, but instability in global energy markets continues. Surcharge increase activity appears to be stabilizing across all industry sectors. Sentiment remained strongly optimistic regarding demand, with five positive growth comments for every cautious comment. Panelists continue to note supply chain and pricing issues as their biggest concerns. Demand expanded, with the (1) New Orders Index improving, supported by stronger growth of new export orders, (2) Customers' Inventories Index remaining at a very low level and (3) Backlog of Orders Index increasing. Consumption (measured by the Production and Employment indexes) was mixed during the period, with a combined minus-0.7-percentage point change to the Manufacturing PMI^® calculation. The Employment Index contracted after expanding for eight straight months, but panelists indicated improvement in ability to hire in May compared to April. Challenges with turnover (quits and retirements) and resulting backfilling continue to plague efforts to adequately staff organizations, but to a slightly lesser extent compared to April. Inputs — expressed as supplier deliveries, inventories and imports — continued to constrain production expansion. The Supplier Deliveries Index indicated deliveries slowed at a slower rate, which was supported by the Inventories Index increase in May. The Imports Index contracted in May after six consecutive months of expansion, reflecting the impact of COVID-19 lockdowns in China. The Prices Index increased for the 24th consecutive month, at a slower rate compared to April.

"All of the six biggest manufacturing industries — Machinery; Computer & Electronic Products; Food, Beverage & Tobacco Products; Transportation Equipment; Petroleum & Coal Products; and Chemical Products — registered moderate-to-strong growth in May.

"Manufacturing performed well for the 24th straight month, with demand registering faster month-over-month growth and consumption softening due to labor force constraints. Overseas partners' disruptions are beginning to impact U.S. manufacturing, creating a near-term headwind for factory output growth. Ten percent of panelists' general comments expressed difficulty obtaining material from their Asian partners, which will impact reliable deliveries in the summer months," says Fiore.

Fifteen manufacturing industries reported growth in May, in the following order: Apparel, Leather & Allied Products; Printing & Related Support Activities; Machinery; Nonmetallic Mineral Products; Computer & Electronic Products; Food, Beverage & Tobacco Products; Transportation Equipment; Paper Products; Petroleum & Coal Products; Plastics & Rubber Products; Fabricated Metal Products; Chemical Products; Miscellaneous Manufacturing; Primary Metals; and Electrical Equipment, Appliances & Components. The only industry reporting a decrease in May compared to April is Furniture & Related Products.

WHAT RESPONDENTS ARE SAYING

• "Suppliers are seeing a light at the end of the tunnel for restoration of (semiconductor) component supply. Second-quarter and Q3 supply appears to be loosening." [Computer & Electronic Products]
• "While orders remain strong and backlogs exist, there's a softening in forecasted orders for leading indicator-type customers and business units." [Chemical Products]
• "The challenge with semiconductors hasn't softened; the situation is worsening due to Chinese COVID-19 lockdowns." [Transportation Equipment]
• "Input costs, particularly grain, oil, dairy and protein, are rising faster than can be passed along at retail and food service, with no relief in sight." [Food, Beverage & Tobacco Products]
• "Our order books are still strong. Material prices continue to rise, with energy and freight noted as the underlying influences on increased costs." [Machinery]
• "Shanghai has been shut down since mid-March. All of the (population) is in lockdown, with no production or port activities. Steel remains in allocation. Electronics lead times are more than 12 months." [Fabricated Metal Products]
• "Supply chain issues are causing us to dramatically extend our lead times. Our production lines have (run) low on or out of parts needed to complete rates every week this month." [Miscellaneous Manufacturing]
• "We've continued to transition to North American sales to avoid ocean vessels, and we are apprehensive about the West Coast ports' labor contract negotiations. A challenge of doing more business by rail is the backlog of rail cars and embargos." [Paper Products]
• "Price increases haven't let up. I thought 2022 was going to be better, but it hasn't been. Shortages (among other issues) are still disrupting the supply chain." [Plastics & Rubber Products]
• "Business is steady. We consolidated shifts and do maintenance on off hours, which is working well." [Primary Metals]

Manufacturing ISM^® Report On Business^® data is seasonally adjusted for the New Orders, Production, Employment and Inventories indexes.
*Number of months moving in current direction.

COMMODITIES REPORTED UP/DOWN IN PRICE AND IN SHORT SUPPLY

Commodities Up in Price
Adhesives and Paint (6); Aluminum* (24); Aluminum Extrusions; Aluminum Products (5); Caustic Soda (3); Copper (5); Corrugate (4); Corrugated Packaging (19); Crude Oil; Diesel Fuel (17); Electrical Components (18); Electronic Components (18); Electronic Controls; Energy (3); Epoxy (2); Fiber Optic Cable; Freight (19); Hydraulic Components; Labor — Temporary (13); Lumber (6); Natural Gas (11); Packaging Supplies (18); Paper (3); Petrochemical Based Products*; Petroleum Based Products; Plastic Resins (5); Polyethylene; Polypropylene (3); Polypropylene Containers; Resin Based Products (2); Rubber Based Products (10); Semiconductors; Solvents (4); Steel* (22); Steel — Fabricated & Machined Components; Steel — Stainless (19); Steel Bar; Steel Castings; Steel Products (21); and Wheat.

Commodities Down in Price
Aluminum*; Petrochemical Based Products*; Steel*; Steel — Scrap; and Steel — Hot Rolled.

Commodities in Short Supply
Aluminum (7); Aluminum Products; Cable Assemblies (3); Electrical Components (20); Electronic Components (18); Electronic Controls; Freight (3); Hydraulic Components; Labor — Temporary (13); Packaging Film; Packaging Products; Paper (2); Petrochemical Based Products; Phosphoric Acid; Plastic Resins; Power Transmission Products; Resin Based Products (3); Semiconductors (18); Steel — Fabricated & Machined Components; Steel Products (2); and Sunflower Products.

Note: The number of consecutive months the commodity is listed is indicated after each item.
*Indicates both up and down in price.

MAY 2022 MANUFACTURING INDEX SUMMARIES

Manufacturing PMI^® 
Manufacturing grew in May, as the Manufacturing PMI^® registered 56.1 percent, 0.7 percentage point higher than the April reading of 55.4 percent. "The Manufacturing PMI^® continued to indicate solid sector expansion and U.S. economic growth in May. Four of the five subindexes that directly factor into the Manufacturing PMI^® were in growth territory. All of the six biggest manufacturing industries registered moderate-to-strong growth in May, in this order: Machinery; Computer & Electronic Products; Food, Beverage & Tobacco Products; Transportation Equipment; Petroleum & Coal Products; and Chemical Products. The New Orders and Production indexes increased at faster rates. The Supplier Deliveries Index slowed at a slower rate and the Inventories Index increased, indicating somewhat easing supply chain congestion. Eight of the 10 subindexes were positive for the period; a reading of 'too low' for the Customers' Inventories Index is considered a positive for future production," says Fiore. A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.

A Manufacturing PMI^® above 48.7 percent, over a period of time, generally indicates an expansion of the overall economy. Therefore, the May Manufacturing PMI^® indicates the overall economy grew in May for the 24th consecutive month following contraction in April and May 2020. "The past relationship between the Manufacturing PMI^® and the overall economy indicates that the Manufacturing PMI^® for May (56.1 percent) corresponds to a 2.6-percent increase in real gross domestic product (GDP) on an annualized basis," says Fiore.

THE LAST 12 MONTHS

New Orders
ISM^®'s New Orders Index registered 55.1 percent in May, an increase of 1.6 percentage points compared to the 53.5 percent reported in April. This indicates that new orders grew for the 24th consecutive month. "All of the six largest manufacturing sectors — Computer & Electronic Products; Food, Beverage & Tobacco Products; Petroleum & Coal Products; Machinery; Chemical Products; and Transportation Equipment, in that order — increased new orders at moderate to strong levels. Price elevation and extended lead times resulted in a continuing slowing in new order rates across the supply chain. Backlog and customer inventories strengthened in the month, indicating that demand remains strong," says Fiore. A New Orders Index above 52.9 percent, over time, is generally consistent with an increase in the Census Bureau's series on manufacturing orders (in constant 2000 dollars).

Of the 18 manufacturing industries, 11 reported growth in new orders in May, in the following order: Apparel, Leather & Allied Products; Computer & Electronic Products; Primary Metals; Food, Beverage & Tobacco Products; Petroleum & Coal Products; Machinery; Miscellaneous Manufacturing; Plastics & Rubber Products; Chemical Products; Transportation Equipment; and Fabricated Metal Products. The only industry reporting a decline in new orders in May is Wood Products. Six industries reported no change in new orders in May as compared to April.

Production
The Production Index registered 54.2 percent in May, 0.6 percentage point higher than the April reading of 53.6 percent, indicating growth for the 24th consecutive month. "Of the top six industries, five —Petroleum & Coal Products; Food, Beverage & Tobacco Products; Machinery; Transportation Equipment; and Chemical Products — expanded in May. Demand remains strong: Hiring and material availability continue to show signs of recovery, but factories are still struggling to hit optimum output rates — primarily due to high levels of employee turnover, which is also causing productivity loss on factory floors," says Fiore. An index above 52.4 percent, over time, is generally consistent with an increase in the Federal Reserve Board's Industrial Production figures.

The eight industries reporting growth in production during the month of May — listed in order — are: Apparel, Leather & Allied Products; Petroleum & Coal Products; Nonmetallic Mineral Products; Paper Products; Food, Beverage & Tobacco Products; Machinery; Transportation Equipment; and Chemical Products. The eight industries reporting a decrease in May, in the following order, are: Textile Mills; Primary Metals; Electrical Equipment, Appliances & Components; Furniture & Related Products; Plastics & Rubber Products; Miscellaneous Manufacturing; Computer & Electronic Products; and Fabricated Metal Products.

Employment
ISM^®'s Employment Index registered 49.6 percent in May, 1.3 percentage points below the April reading of 50.9 percent. "The index contracted after eight consecutive months of expansion. This is the lowest reading since November 2020, when the index registered 48.1 percent. Of the six big manufacturing sectors, three (Machinery; Transportation Equipment; and Chemical Products) expanded. Survey panelists' companies are still struggling to meet labor management plans, though with more signs of improvement: A larger share of comments (7 percent in May, up from 1 percent in April) noted greater hiring ease. An overwhelming majority of panelists again indicate their companies are hiring, and for the second month, 89 percent of Employment Index comments were hiring focused. Among those respondents, 30 percent expressed difficulty in filling positions, down from 34 percent in April, a positive development. Turnover rates remain elevated (36 percent of comments cited backfills and retirements, a decrease from 39 percent in April). Employment levels, driven primarily by turnover and a smaller labor pool, remain the top issue affecting further output growth," says Fiore. An Employment Index above 50.5 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) data on manufacturing employment.

Of 18 manufacturing industries, eight industries reported employment growth in May, in the following order: Apparel, Leather & Allied Products; Printing & Related Support Activities; Machinery; Electrical Equipment, Appliances & Components; Plastics & Rubber Products; Transportation Equipment; Fabricated Metal Products; and Chemical Products. The seven industries reporting a decrease in employment in May — in the following order — are: Petroleum & Coal Products; Textile Mills; Furniture & Related Products; Primary Metals; Miscellaneous Manufacturing; Food, Beverage & Tobacco Products; and Computer & Electronic Products.

Supplier Deliveries^†
The delivery performance of suppliers to manufacturing organizations was slower in May, as the Supplier Deliveries Index registered 65.7 percent, 1.5 percentage points lower than the 67.2 percent reported in April. All six of the top manufacturing industries (Machinery; Computer & Electronic Products; Petroleum & Coal Products; Food, Beverage & Tobacco Products; Transportation Equipment; and Chemical Products, in that order) reported slower deliveries. "Deliveries slowed at a slower rate compared to the previous month. The index continues to reflect suppliers' difficulties in meeting demand from panelists' companies. In May, suppliers remained in a labor-constrained environment, based on panelists' comments and the Employment Index falling into contraction territory. Transportation networks reflected improvement compared to April. Among supplier delivery comments, 9 percent noted stable month-over-month improvement. Improvement in the index will be constrained at least in the short term due to continuing labor issues and the expected impact of recent China lockdowns," says Fiore. A reading below 50 percent indicates faster deliveries, while a reading above 50 percent indicates slower deliveries.

Of 18 manufacturing industries, 15 reported slower supplier deliveries in May, in the following order: Apparel, Leather & Allied Products; Nonmetallic Mineral Products; Paper Products; Primary Metals; Machinery; Computer & Electronic Products; Petroleum & Coal Products; Food, Beverage & Tobacco Products; Textile Mills; Transportation Equipment; Fabricated Metal Products; Miscellaneous Manufacturing; Plastics & Rubber Products; Chemical Products; and Furniture & Related Products. No industry reported faster supplier deliveries in May as compared to April.

Inventories
The Inventories Index registered 55.9 percent in May, 4.3 percentage points higher than the 51.6 percent reported for April. "Manufacturing inventories expanded at a faster rate compared to April. Of the six big manufacturing industries, five (Computer & Electronic Products; Food, Beverage & Tobacco Products; Transportation Equipment; Machinery; and Chemical Products) grew their inventories of manufacturing materials in May," says Fiore. An Inventories Index greater than 44.4 percent, over time, is generally consistent with expansion in the Bureau of Economic Analysis (BEA) figures on overall manufacturing inventories (in chained 2000 dollars).

The 14 industries reporting higher inventories in May — in the following order — are: Apparel, Leather & Allied Products; Printing & Related Support Activities; Textile Mills; Computer & Electronic Products; Nonmetallic Mineral Products; Wood Products; Food, Beverage & Tobacco Products; Electrical Equipment, Appliances & Components; Miscellaneous Manufacturing; Transportation Equipment; Machinery; Fabricated Metal Products; Plastics & Rubber Products; and Chemical Products. The three industries reporting contracting inventories in May are: Paper Products; Petroleum & Coal Products; and Primary Metals.

Customers' Inventories^†
ISM^®'s Customers' Inventories Index registered 32.7 percent in May, 4.4 percentage points lower than the 37.1 percent reported for April, indicating that customers' inventory levels were considered much too low. "Customers' inventories are too low for the 68th consecutive month, a positive for future production growth. For 22 straight months, the Customers' Inventories Index has been at historically low levels," says Fiore.

Only Apparel, Leather & Allied Products reported customers' inventories as too high in May. The 14 industries reporting customers' inventories as too low during May — listed in order — are: Textile Mills; Primary Metals; Transportation Equipment; Petroleum & Coal Products; Computer & Electronic Products; Furniture & Related Products; Plastics & Rubber Products; Paper Products; Miscellaneous Manufacturing; Chemical Products; Machinery; Food, Beverage & Tobacco Products; Fabricated Metal Products; and Electrical Equipment, Appliances & Components.

Prices^†
The ISM^® Prices Index registered 82.2 percent, down 2.4 percentage points compared to the April reading of 84.6 percent, indicating raw materials prices increased for the 24th consecutive month, at a slower rate in May. The Prices Index has exceeded 70 percent in 17 out of the last 18 months and been above 60 percent for 21 straight months. "Continued oil and fuel price increases, packaging supplies (including corrugate) food ingredients, commodity materials (copper, steel and aluminum) and petroleum-based products and petrochemicals were the primary causes of prices growth. Notably, 5.6 percent of respondents reported lower prices in May, indicating a slow but steady move towards price softening," says Fiore. A Prices Index above 52.6 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) Producer Price Index for Intermediate Materials.

In May, 17 of 18 industries reported paying increased prices for raw materials, in the following order: Apparel, Leather & Allied Products; Nonmetallic Mineral Products; Printing & Related Support Activities; Textile Mills; Chemical Products; Computer & Electronic Products; Food, Beverage & Tobacco Products; Paper Products; Machinery; Miscellaneous Manufacturing; Transportation Equipment; Petroleum & Coal Products; Primary Metals; Plastics & Rubber Products; Furniture & Related Products; Electrical Equipment, Appliances & Components; and Fabricated Metal Products. No industry reported paying decreased prices for raw materials in May.

Backlog of Orders^†
ISM^®'s Backlog of Orders Index registered 58.7 percent in May, a 2.7-percentage point increase compared to the 56 percent reported in April, indicating order backlogs expanded for the 23rd straight month. Of the six largest manufacturing sectors, four — Computer & Electronic Products; Machinery; Transportation Equipment; and Food, Beverage & Tobacco Products — expanded their order backlogs. "Backlogs expanded in May at a faster rate, as output remains constrained and new orders continue at moderate levels," says Fiore.

Ten industries reported growth in order backlogs in May, in the following order: Textile Mills; Computer & Electronic Products; Machinery; Transportation Equipment; Primary Metals; Fabricated Metal Products; Electrical Equipment, Appliances & Components; Food, Beverage & Tobacco Products; Plastics & Rubber Products; and Miscellaneous Manufacturing. The only industry reporting lower backlogs in May is Wood Products. Six industries reported no change in order backlogs in May as compared to April.

New Export Orders^†
ISM^®'s New Export Orders Index registered 52.9 percent in May, up 0.2 percentage point compared to the April reading of 52.7 percent. "The New Export Orders Index grew for the 23rd consecutive month, at a marginally faster rate in May. For the third straight month, COVID-19 in China has suppressed customer demand from overseas, and the war in Ukraine has limited European demand. Of the six big industry sectors, five — Food, Beverage & Tobacco Products; Computer & Electronic Products; Transportation Equipment; Chemical Products; and Machinery — expanded," says Fiore.

Seven industries reported growth in new export orders in May, in the following order: Apparel, Leather & Allied Products; Food, Beverage & Tobacco Products; Computer & Electronic Products; Miscellaneous Manufacturing; Transportation Equipment; Chemical Products; and Machinery. The three industries reporting a decrease in new export orders in May are: Paper Products; Wood Products; and Electrical Equipment, Appliances & Components. Six industries reported no change in exports in May as compared to April.

Imports^†
ISM^®'s Imports Index registered 48.7 percent in May, a decrease of 2.7 percentage points compared to April's figure of 51.4 percent. "Imports contracted in May, with the index registering its lowest reading since May 2020 (41.3 percent). Import demand remains strong, but we are beginning to see the impact of port closures in China, which will lead to additional supply chain disruptions," says Fiore.

The two industries reporting growth in imports in May are: Food, Beverage & Tobacco Products; and Computer & Electronic Products. Nine industries — in the following order — reported lower volumes of imports in May: Paper Products; Wood Products; Primary Metals; Fabricated Metal Products; Electrical Equipment, Appliances & Components; Plastics & Rubber Products; Miscellaneous Manufacturing; Chemical Products; and Machinery. Seven industries reported no change in imports in May.

^†The Supplier Deliveries, Customers' Inventories, Prices, Backlog of Orders, New Export Orders, and Imports indexes do not meet the accepted criteria for seasonal adjustments.

Buying Policy
The average commitment lead time for Capital Expenditures in May was 178 days, an increase of five days compared to April and an all-time high. (ISM^® began tracking lead times data in 1987.) CapEx lead times have increased in nine of the last 12 months, for a net gain of 34 days since June 2021 (144 days). Average lead time in May for Production Materials decreased by one day, to 99 days. Average lead time for Maintenance, Repair and Operating (MRO) Supplies decreased by one day, to 48 days.

About This Report
DO NOT CONFUSE THIS NATIONAL REPORT with the various regional purchasing reports released across the country. The national report's information reflects the entire U.S., while the regional reports contain primarily regional data from their local vicinities. Also, the information in the regional reports is not used in calculating the results of the national report. The information compiled in this report is for the month of May 2022.

The data presented herein is obtained from a survey of manufacturing supply executives based on information they have collected within their respective organizations. ISM^® makes no representation, other than that stated within this release, regarding the individual company data collection procedures. The data should be compared to all other economic data sources when used in decision-making.

Data and Method of Presentation
The Manufacturing ISM^® Report On Business^® is based on data compiled from purchasing and supply executives nationwide. The composition of the Manufacturing Business Survey Committee is stratified according to the North American Industry Classification System (NAICS) and each of the following NAICS-based industry's contribution to gross domestic product (GDP): Food, Beverage & Tobacco Products; Textile Mills; Apparel, Leather & Allied Products; Wood Products; Paper Products; Printing & Related Support Activities; Petroleum & Coal Products; Chemical Products; Plastics & Rubber Products; Nonmetallic Mineral Products; Primary Metals; Fabricated Metal Products; Machinery; Computer & Electronic Products; Electrical Equipment, Appliances & Components; Transportation Equipment; Furniture & Related Products; and Miscellaneous Manufacturing (products such as medical equipment and supplies, jewelry, sporting goods, toys and office supplies). The data are weighted based on each industry's contribution to GDP. According to the BEA estimates for 2020 GDP (released December 22, 2021), the six largest manufacturing subsectors are: Computer & Electronic Products; Chemical Products; Transportation Equipment; Petroleum & Coal Products; Food, Beverage & Tobacco Products; and Machinery. Beginning in February 2018 with January 2018 data, computation of the indexes is accomplished utilizing unrounded numbers.

Survey responses reflect the change, if any, in the current month compared to the previous month. For each of the indicators measured (New Orders, Backlog of Orders, New Export Orders, Imports, Production, Supplier Deliveries, Inventories, Customers' Inventories, Employment and Prices), this report shows the percentage reporting each response, the net difference between the number of responses in the positive economic direction (higher, better and slower for Supplier Deliveries) and the negative economic direction (lower, worse and faster for Supplier Deliveries), and the diffusion index. Responses are raw data and are never changed. The diffusion index includes the percent of positive responses plus one-half of those responding the same (considered positive).

The resulting single index number for those meeting the criteria for seasonal adjustments (Manufacturing PMI^®, New Orders, Production, Employment and Inventories) is then seasonally adjusted to allow for the effects of repetitive intra-year variations resulting primarily from normal differences in weather conditions, various institutional arrangements, and differences attributable to non-moveable holidays. All seasonal adjustment factors are subject annually to relatively minor changes when conditions warrant them. The Manufacturing PMI^® is a composite index based on the diffusion indexes of five of the indexes with equal weights: New Orders (seasonally adjusted), Production (seasonally adjusted), Employment (seasonally adjusted), Supplier Deliveries, and Inventories (seasonally adjusted).

Diffusion indexes have the properties of leading indicators and are convenient summary measures showing the prevailing direction of change and the scope of change. A Manufacturing PMI^® reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally declining. A Manufacturing PMI^® above 48.7 percent, over a period of time, indicates that the overall economy, or gross domestic product (GDP), is generally expanding; below 48.7 percent, it is generally declining. The distance from 50 percent or 48.7 percent is indicative of the extent of the expansion or decline. With some of the indicators within this report, ISM^® has indicated the departure point between expansion and decline of comparable government series, as determined by regression analysis. The Manufacturing ISM^® Report On Business^® survey is sent out to Manufacturing Business Survey Committee respondents the first part of each month. Respondents are asked to report on information for the current month for U.S. operations only. ISM^® receives survey responses throughout most of any given month, with the majority of respondents generally waiting until late in the month to submit responses to give the most accurate picture of current business activity. ISM^® then compiles the report for release on the first business day of the following month.

The industries reporting growth, as indicated in the Manufacturing ISM^® Report On Business^® monthly report, are listed in the order of most growth to least growth. For the industries reporting contraction or decreases, those are listed in the order of the highest level of contraction/decrease to the least level of contraction/decrease.

Responses to Buying Policy reflect the percent reporting the current month's lead time, the approximate weighted number of days ahead for which commitments are made for Capital Expenditures; Production Materials; and Maintenance, Repair and Operating (MRO) Supplies, expressed as hand-to-mouth (five days), 30 days, 60 days, 90 days, six months (180 days), a year or more (360 days), and the weighted average number of days. These responses are raw data, never revised, and not seasonally adjusted.

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About Institute for Supply Management^®
Institute for Supply Management^® (ISM^®) serves supply management professionals in more than 90 countries. Its 50,000 members around the world manage about US$1 trillion in corporate and government supply chain procurement annually. Founded in 1915 as the first supply management institute in the world, ISM is committed to advancing the practice of supply management to drive value and competitive advantage for its members, contributing to a prosperous and sustainable world. ISM leads the profession through the ISM Report On Business^®, its highly regarded certification programs and the ISM Advance^™ Digital Platform. This report has been issued by the association since 1931, except for a four-year interruption during World War II.

The full text version of the Manufacturing ISM^® Report On Business^® is posted on ISM^®'s website at www.ismrob.org on the first business day* of every month after 10:00 a.m. ET.

The next Manufacturing ISM^® Report On Business^® featuring June 2022 data will be released at 10:00 a.m. ET on Friday, July 1, 2022.

*Unless the New York Stock Exchange is closed.

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SOURCE Institute for Supply Management

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