Even amidst a potential trade war, the U.S. manufacturing industry continues to grow. According to a new report from the Institute of Supply Management (ISM), May was the 100th consecutive month in which the industry expanded. This means that for the past the eight years, the American manufacturing industry has yet to experience a month in which it contracted.
In its report, the ISM said the U.S. manufacturing industry’s factory index increased from 57.3 to 58.7 in May, with new orders increasing from 61.2 to 63.7. Of course, any reading over 50 signals growth and expansion, whereas readings below 50 signal contraction. The ISM also said that order backlogs for the U.S. manufacturing industry in May grew to 63.5 — the highest its been since April 2004. Furthermore, employment in the U.S. manufacturing industry increased to 56.3, which is the first time it’s grew since the beginning of the year.
The ISM also noted that the gauge of input prices in the U.S. manufacturing industry increased for its sixth consecutive month. This has led some manufacturing companies to believe that contraction on the horizon. However, analysis say this is just the natural ebb and flow of the industry: It shrinks and contracts, the latter of which is more common and with a higher degree, thereby ensuring the market remains stable and health. What does this mean for the future of the U.S. manufacturing industry? It means the market will likely continue to grow, with June expected to be the 101th consecutive month in which the industry expands.
When speaking about the ISM’s report analyzing the U.S. manufacturing industry for the month of May, Anthony Nieves explained that most manufacturing employers and professionals are optimistic about the future. Although there’s a certain level of uncertainty, this report suggests that it’s doing well — and there’s no signs of it changing direction anytime soon.
“The majority of respondents are optimistic about business conditions and the overall economy,” said the ISM’s Anthony Nieves. “There continue to be concerns about the uncertainty surrounding tariffs, trade agreements and the impact on cost of goods sold.”
The bottom line is that May was an excellent month for the U.S. manufacturing industry. As revealed in the ISM’s report, the industry grew for the 100th consecutive month. Assuming this trend continues, which analysts say it’s the most likely outcome, it will lead to new jobs and a healthier overall economy. For more details on the status of the U.S. manufacturing industry, check back with our blog here at Monroe Engineering.