ISM Factory Index Improves, But Still Shows Contraction

U.S. manufacturing levels improved in May but continued to show contraction, the Institute for Supply Management said Monday.

ISM’s factory index improved to 49.6, from a 48.6 reading in April. Readings above 50 indicate expansion, while below that show contraction.

The index level bested economists’ forecasts of a 48.5 reading, Bloomberg reported.

The production index improved 2.1% to 51.2, while new orders rose 3.2% to 49.7, ISM said.

“Manufacturers find themselves caught between rising costs and weakening demand in many industries. Exports continue strong due to the weak dollar — without the weak dollar the story would be much more negative in manufacturing,” said Norbert Ore, chair of ISM’s manufacturing business survey committee.

The factory sector is one of trucking’s largest and most important customers.