A new Institute for Supply Management report released today indicates that the manufacturing sector contracted last month for the first time since November 2012.
Based on surveys of purchasing managers, the ISM's May Purchasing Managers Index clocked in at 49%, 1.7 points less than April's 2013 low and a whopping two points less than analysts' estimates. May's number marks only the second contraction in manufacturing since July 2009, according to the ISM. (A reading above 50% indicates that the manufacturing economy is generally expanding; below 50% indicates that it is generally contracting.)
Examining the index on a component-by-component basis, new orders, production, and backlog of orders all took significant dips. New orders fell 3.5 points to 48.8, production dropped 4.9 points to 48.6, and order backlogs slumped five points to 48.0.
The contraction seems to be unequally divided among industries. Ten of the 18 reporting industries noted overall expansion, with "printing & related support activities" and "nonmetallic mineral products" leading the way. Of the six recording contraction, "miscellaneous manufacturing" and "transportation equipment" fared worst.