ISM Manufacturing PMI — May 2026
Headline: The Manufacturing PMI rose 1.3 points to 54.0 in May, signaling expansion at a faster rate for the fifth consecutive month. The reading was a six-month high, well above the prior six-month average of 51.1 and the 47.9–52.7 range. It remains above the manufacturing breakeven of 50.0; the broader economy also continued to grow, marking its 19th consecutive month above its 47.5 breakeven.
Sub-indices:
| Index | Level | Prior | Change | Direction | vs 6-mo |
|---|---|---|---|---|---|
| New Orders | 56.8 | 54.1 | +2.7 | Growing | above avg (52.6) |
| Production | 54.3 | 53.4 | +0.9 | Growing | above avg (53.4) |
| Employment | 48.6 | 46.4 | +2.2 | Contracting | above avg (46.8) |
| Supplier Deliveries | 60.6 | 60.6 | 0.0 | Slowing | above avg (54.9) |
| Inventories | 49.9 | 49.0 | +0.9 | Contracting | 6-mo high |
| Customers' Inventories | 42.7 | 39.1 | +3.6 | Too Low | above avg (40.8) |
| Prices | 82.1 | 84.6 | -2.5 | Increasing | above avg (68.2) |
| Backlog of Orders | 52.2 | 51.4 | +0.8 | Growing | above avg (50.6) |
| New Export Orders | 50.6 | 47.9 | +2.7 | Growing | 6-mo high |
| Imports | 53.0 | 50.3 | +2.7 | Growing | above avg (50.2) |
Key moves:
- The headline PMI reached a six-month high, supported by New Orders at 56.8, up 2.7 points and above its six-month average.
- New Export Orders crossed above 50 to 50.6, a six-month high, from 47.9 in April.
- Inventories rose to 49.9, also a six-month high, while remaining marginally in contraction; Employment improved but stayed below 50 at 48.6.
Insights:
- The demand picture strengthened materially: New Orders accelerated to 56.8, Backlog of Orders rose to 52.2, and Production remained firmly expansionary at 54.3. The combination points to continued production support in coming months.
- Customers’ Inventories remained “Too Low” at 42.7, a bullish forward-demand signal under ISM methodology, as customers may need to replenish stocks. The improvement from 39.1 does not remove the underlying reorder support.
- The rise in manufacturers’ Inventories to 49.9 occurred alongside stronger New Orders and Backlogs, making the move more consistent with reduced destocking or deliberate preparation for demand than an involuntary buildup. The inventory index nevertheless remains just below 50.
- Employment improved by 2.2 points but remained in contraction, an important divergence from the broader expansion in orders and production. Manufacturing output is strengthening without yet translating into net job growth.
- Supplier Deliveries stayed elevated at 60.6, indicating slower deliveries and continued demand or supply-chain tightness. Prices remained highly inflationary at 82.1, despite easing from 84.6, implying ongoing input-cost and margin pressure.
Breadth & prices: Growth was broad-based, with 16 industries reporting expansion and none contracting. Input prices continued to increase, although the Prices index eased 2.5 points to 82.1.
Takeaway: May’s print confirms a firmer manufacturing upswing, with the PMI at a six-month high and forward-demand indicators strengthening. The cycle remains constructive, but persistent input-cost pressure, delivery constraints and sub-50 employment temper the quality of the expansion.