(Tempe, Arizona) - Economic activity in the manufacturing sector failed to grow in May for the 16th consecutive month, while the overall economy grew for the first time following seven months of decline, say the nation's supply executives in the latest Manufacturing ISM Report On Business.

The report was issued today by Norbert J. Ore, CPSM, C.P.M., chair of the Institute for Supply Management Manufacturing Business Survey Committee. "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. May is the first month of growth in the New Orders Index since November 2007, with nine of 18 industries reporting growth. New orders are considered a leading indicator, and the index has risen rapidly after bottoming at 23.1 percent in December 2008. Also, the Customers' Inventories Index remained below 50 percent for the second consecutive month, offering encouragement that supply chains are starting to free themselves of excess inventories as nine industries report their customers' inventories as 'too low'. The prices that manufacturers pay for raw materials and services continued to decline, but at a slower rate than in April."

PERFORMANCE BY INDUSTRY

Five of the 18 manufacturing industries reported growth in May. These industries - listed in order - are: Nonmetallic Mineral Products; Plastics & Rubber Products; Machinery; Food, Beverage & Tobacco Products; and Printing & Related Support Activities. The industries reporting contraction in May - listed in order - are: Textile Mills; Furniture & Related Products; Electrical Equipment, Appliances & Components; Fabricated Metal Products; Primary Metals; Transportation Equipment; Computer & Electronic Products; Wood Products; Apparel, Leather & Allied Products; Miscellaneous Manufacturing; Chemical Products; Petroleum & Coal Products; and Paper Products.

WHAT RESPONDENTS ARE SAYING ...

    •    "Some amount of havoc is about to erupt, with companies pushing for increased capacity when suppliers have taken capacity offline." (Computer & Electronic Products)

    •    "Business is actually better than plan." (Food, Beverage & Tobacco Products)

    •    "Realistically, we don't see any of our major customers looking to place business until mid-2010 at the earliest." (Machinery)

    •    "April was flat on sales. May looking better." (Primary Metals)

    •    "Business still trending downward, but not as fast." (Chemical Products)