ISM Manufacturing Index Improves in May

Manufacturing in the U.S. improved last month but still showed contraction overall, the Institute for Supply Management said Monday.

ISM’s monthly factory services index for May rose to a reading of 42.8, from 40.1 in April, ISM said in its monthly report.

Figures of more than 50 indicate expansion, while below that shows contraction.

ISM’s new orders index improved 3.9 points to a 51.1 reading, while supplier deliveries gained 4.9 points to 49.8.

The production index rose 5.6 points to a 46 reading and prices jumped 11.5 to 43.5.

“While employment and inventories continue to decline at a rapid rate and the sector continued to contract during the month, there are signs of improvement,” said Norbert Ore, chair of ISM’s business survey committee.

“May is the first month of growth in the new orders index since November 2007, with nine of 18 industries reporting growth,” he said in a statement.

The factory index measures manufacturing components of the economy.