Purchasing Managers Index - May 1 2013

01-06-2013 16:15

PMI climbs to 51.9 in May – industrial economy improves as second half approaches

• The PMI rose by 2.3 points from 49.6 in April to 51.9 in May. This increase was broad based, with four out of five component indices making positive contributions to the composite PMI. After one month just below the 50 mark, the PMI is back in the growth zone.
  
  
• New orders made the largest positive contribution to the PMI, accounting for over half of the increase. The recovery in new orders was primarily due to an improved order scenario from the home market, where the index rose from 46.7 in April to 51.3 in May. New orders from the export market fell somewhat from 51.8 in April to 50.8 but nevertheless remain in the growth zone. The index for order backlogs dropped from 49.3 in April to 48.2 in May.
  
  
• The index for production plans grew from 55.9 in April to 59.1 in May. This signals an increase in production for the next six months and indicates an improvement in the underlying strength of the industrial economy as summer and the second half of the year approach. The production index climbed from 52.8 in April to 55.2 in May. The employment index rose by nearly four points to 46.3, but remains below the 50 mark, indicating that companies remain cautious when it comes to hiring.
  
  
• The index for suppliers’ commodity and intermediate goods prices increased by more than four points, landing at 41.6 in May. This index level is still quite low, confirming that price pressure on commodity and intermediate goods remains weak.