The ISM Manufacturing Index measures manufacturing activity based on a monthly survey of more than 300 manufacturing purchasing managers. The survey is conducted by the Institute of Supply Chain Management (ISM).
An index of more than 50 indicates expansion in manufacturing in comparison with the previous month. While a reading of 50 indicates no change, and a reading below 50 suggests a contraction of the manufacturing sector. The monthly announcement of the ISM Manufacturing Index greatly influences business confidence as purchasing managers are in the best position to assess the ebb and flow of business conditions.
The index climbed to 43.1% in May from an 11-year low of 41.5% in April. Below are some highlights from the report.
"May appears to be a transition month, as many panelists and their suppliers returned to work late in the month." Said Timothy Fiore, chair of the ISM Business Survey Committee "However, demand remains uncertain, likely impacting inventories, customer inventories, employment, imports and backlog of orders."