ISM Manufacturing Index Beats Expectations

By John S. McClenahen Strengthened by new orders for factory goods, the Institute for Supply Management's (ISM) manufacturing index rose to 55.7% in May, more than a full percentage point better than the 54.5% most economists expected. The May figure was the fourth consecutive monthly increase in the closely watched index and 1.8 percentage points above the 53.9% recorded in April of this year. "This should help establish momentum . . . that will carry forward into the third quarter," says Norbert J. Ore, group director for strategic sourcing and procurement at Georgia-Pacific Corp. and chairperson of ISM's manufacturing business survey committee. A mark above 50% on the index indicates the manufacturing sector of the U.S. economy is growing; a figure below 50% signals contraction. Of the 20 manufacturing industries included in the index, 18 registered growth last month. They were petroleum; textiles; rubber and plastic products; transportation equipment; furniture; glass, stone and aggregate; instruments and photographic equipment; primary metals; fabricated metals; wood and wood products; electronic components and equipment; tobacco; paper; chemicals; printing and publishing; food; industrial and commercial equipment and computers; and apparel.

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