(Finance) – The state of health of theUS manufacturing activity as of May 2023. According to the latest PMI data from S&P Global, the deterioration was only marginal, but was driven by a solid contraction in new orders amid weak demand conditions.
In May, the manufacturing PMI index moved to 48.4 pointslower than the 48.5 points of the preliminary and consensus estimate, and below the 50.2 points of the previous month.
The index then moves under the key threshold by 50 points, which acts as a watershed between expansion (above 50 points) and contraction (below 50 points) of activity.
“The month of May saw a renewed deterioration in trading conditions in the US manufacturing economy, which will add to the wider economic health concerns and for the risks of recession,” he commented Chris WilliamsonChief Business Economist of S&P Global Market Intelligence.
Although a record improvement in supplier delivery performance helped manufacturers fill backorders in May, generating a third consecutive monthly increase in output, the overall rate of output growth remained disappointingly low thanks to a further decline in new incoming orders“.
According to Williamson, “unless demand picks up, production growth will go into decline as it is clearly unsustainable to rely solely on backlogs, which are now selling out at the fastest pace in three years. So companies are cutting back drastically their input purchases and try to minimize inventories, belt-tightening for tough times ahead“.