TEMPE, Ariz. — June 1, 2026 —  Economic activity in the manufacturing sector expanded in May for the fifth consecutive month, say the nation’s supply executives in the latest ISM^® Manufacturing PMI^® Report.

The report was issued today by Susan Spence, MBA, Chair of the Institute for Supply Management^® (ISM^®) Manufacturing Business Survey Committee.

“The Manufacturing PMI^® registered 54 percent in May, 1.3 percentage points higher than in April and its highest reading since May 2022 (55.9 percent). The overall economy continued in expansion for the 19th month in a row. (A Manufacturing PMI^® above 47.5 percent, over a period of time, generally indicates an expansion of the overall economy.) The New Orders Index expanded for the fifth consecutive month after four straight readings in contraction, registering 56.8 percent, up 2.7 percentage points compared to April’s figure of 54.1 percent. The May reading of the Production Index (54.3 percent) is 0.9 percentage point higher than April’s reading of 53.4 percent. The Prices Index remained in expansion (or ‘increasing’ territory), registering 82.1 percent, a 2.5-percentage point decrease from April’s reading of 84.6 percent. The Backlog of Orders Index registered 52.2 percent, up 0.8 percentage point compared to the 51.4 percent recorded in April. The Employment Index registered 48.6 percent, up 2.2 percentage points from April’s figure of 46.4 percent,” says Spence.

“The Supplier Deliveries Index indicated slowing performance for the sixth month in a row after one month in ‘faster’ territory. The reading of 60.6 percent repeated its April figure after the index increased in each of the previous five months. (Supplier Deliveries is the only ISM^® PMI^® Reports index that is inversed; a reading of above 50 percent indicates slower deliveries, which is typical as the economy improves and customer demand increases.)

“The Inventories Index registered 49.9 percent, up 0.9 percentage point compared to April’s reading of 49 percent. The Customers’ Inventories Index reading of 42.7 percent is 3.6 percentage points higher as compared to the 39.1 percent recorded in April.

“The New Export Orders Index returned to expansion territory with a reading of 50.6 percent, 2.7 percentage points higher than the 47.9 percent registered in April. The Imports Index registered 53 percent, 2.7 percentage points higher than April’s reading of 50.3 percent.”

Spence continues, “In May, U.S. manufacturing activity remained in expansion territory, growing at a faster pace compared to the month before. Of the five subindexes that make up the PMI^®, the New Orders index indicated faster growth compared to the previous month, the Supplier Deliveries index stayed the same, the Production Index grew at a faster rate, and the Employment and Inventories indexes remained in contraction, though both improved.

“In May, 25 percent of the comments were positive and 69 percent negative, with a 1-to-2.7 ratio of positive to negative sentiment. Among comments, the Iran war was mentioned in 42 percent and tariffs in 18 percent; 57 percent of the panelists mentioned pricing volatility as an issue for their companies.

“Three of four demand indicators (the New Orders, Backlog of Orders, and New Export Orders indexes) were in expansion. The Customers’ Inventories Index remains in ‘too low’ territory, contracting at a slower rate. A ‘too low’ status for the Customers’ Inventories Index is usually considered positive for future production.

“Regarding output, the Production Index is in expansion for the seventh month in a row, and the Employment Index increased by 2.2 percentage points but remained in contraction. Among panelists, 50 percent indicated that managing head counts remains the norm at their companies, while 50 percent are hiring.

“Finally, inputs (defined as supplier deliveries, inventories, prices and imports) were mostly improved month over month. With the same reading as in April, the Supplier Deliveries Index stayed at its highest level since May 2022 (65.7 percent). The Inventories Index contracted at a slower rate, the Prices Index declined by 2.5 percentage points and the Imports Index grew at a faster rate.

“Looking at the manufacturing economy, only 2 percent of the sector’s gross domestic product (GDP) contracted in May, compared to 19 percent in April, and the percentage of manufacturing GDP in strong contraction (defined as a composite PMI^® of 45 percent or lower) was also 2 percent, the same as in April. The share of sector GDP with a PMI^® at or below 45 percent is a good metric to gauge overall manufacturing weakness. All of the six largest manufacturing industries expanded in May, in the following order: Computer & Electronic Products; Machinery; Transportation Equipment; Petroleum & Coal Products; Chemical Products; and Food, Beverage & Tobacco Products. In May, all indexes headed in a direction that suggests sustained growth,” says Spence.

The 16 manufacturing industries reporting growth in May — listed in order — are: Printing & Related Support Activities; Textile Mills; Nonmetallic Mineral Products; Paper Products; Electrical Equipment, Appliances & Components; Plastics & Rubber Products; Primary Metals; Miscellaneous Manufacturing; Computer & Electronic Products; Furniture & Related Products; Machinery; Transportation Equipment; Petroleum & Coal Products; Chemical Products; Fabricated Metal Products; and Food, Beverage & Tobacco Products. The only industry reporting contraction in May is Wood Products.

WHAT RESPONDENTS ARE SAYING

• “Impact of Iran conflict starting to directly and negatively impact cost of supply chain. Oil and related commodities are escalating in price.” [Transportation Equipment]
• “The Middle East conflict is triggering shipment delays and uncertainties. Elevated gas prices and inflation will surely impact our purchases. However, over the last quarter, we’ve seen increased demand that was unexpected.” [Machinery]
• “As with all companies, we have felt the effects of fuel-related inflation and general market uncertainty due to overall economic variability and geopolitical events that have impacted such markets as construction, automotive and agriculture, as well as the general industrial sector.” [Chemical Products]
• “Continuing trends of 15-percent sales increase in April, cost increases on a majority of raw materials, and fuel charges on many inbound and outbound deliveries. We remain cautiously optimistic that if global economic factors stabilize and the Iran conflict ends, we can continue with increased sales and maintain acceptable margins.” [Chemical Products]
• “Cost of diesel is having huge impacts on our profitability. Confusion abounds around tariff refunds. We purchase many imported goods but in most cases are not the importer of record, so it is currently unclear to what we may be entitled.” [Food, Beverage & Tobacco Products]
• “Prices continue to rise for many products — some due to increase in data center creation for electronic components, others as a result of the Iran war and reductions in availability of oil/petroleum.” [Computer & Electronic Products]
• “Supply constraints continue to propagate and are a key headwind to supporting increased aerospace and defense demand. Semiconductors, critical minerals and certain types of raw materials are illustrative examples of sales plans at risk. Corporate risk mitigation actions are underway to secure supply in the midst of constraints.” [Transportation Equipment]
• “The current atmosphere is one of extreme uncertainty and concern for the future in terms of both price stability and longer-term supply continuity related to the Iran conflict and Strait of Hormuz closure. We have a lot of negotiations in process related to requested price increases, some related to oil prices and some still fallout from the 2025 tariff/geopolitical climate.” [Miscellaneous Manufacturing]
• “Continued dynamic random-access memory (DRAM) volatility, increased gas prices and tariffs are causing long lead constraints and price hikes that customers are not willing to bear. Panic is starting within our industry.” [Electrical Equipment, Appliances & Components]
• “Business appears to be weakening — uncertainty surrounding the Iran war, rising energy prices and customers unwilling to commit to expenditures beyond a very short term.” [Fabricated Metal Products]

ISM^® Manufacturing PMI^® Report data is seasonally adjusted for the New Orders, Production, Employment and Inventories indexes.
*Number of months moving in current direction.

COMMODITIES REPORTED UP/DOWN IN PRICE AND IN SHORT SUPPLY

Commodities Up in Price
Acrylic Products (2); Aluminum (30); Aluminum Products (2); Brass; Carbides; Chemical Products (3); Cooking Fats and Oils (3); Copper (11); Copper Based Products (6); Corn (3); Corrugated Products (2); Diesel Fuel (3); Electronic Components (5); Ethylene; Freight (3); Fuel (3); Gasoline; Maintenance, Repair, and Operating (MRO) Supplies; Memory Components (3); Metal Products (2); Methanol (3); Ocean Freight; Oil (2); Oil Based Products (2); Packaging Materials (2); Paper Products (2); Petroleum Based Products (2); Plastic Based Products (2); Plastics (3); Polyethylene Resins (2); Polypropylene; Resins (4); Soybean Products (3); Steel (7); Steel — Carbon (2); Steel — Hot Rolled (5); Steel — Stainless (4); Steel Products (6); Sulfur Products (2); Transportation Costs (2); Trucking Services; Tungsten Products (4); and Wire and Cable (2).

Commodities Down in Price
None.

Commodities in Short Supply
Aluminum (2); Electrical Components (11); Electronic Components (15); Memory (5); Propylene Glycol (2); Resins; Semiconductors (3); Steel Products; and Tungsten Products.

Note: The number of consecutive months the commodity is listed is indicated after each item.

MAY 2026 MANUFACTURING INDEX SUMMARIES

Manufacturing PMI^®
The U.S. manufacturing sector expanded in May for the fifth straight month following a 10-month period of contraction, registering 54 percent, an increase of 1.3 percentage points as compared to April. This is the highest PMI^® reading since it registered 55.9 percent in May 2022. Of the five subindexes that directly factor into the Manufacturing PMI^®, three (New Orders, Production and Supplier Deliveries) were in expansion territory, the same as in April. The Employment and Inventories indexes both stayed in contraction but improved compared to April. All of the six largest manufacturing industries expanded in May. A reading above 50 percent indicates that the manufacturing sector is generally expanding; below 50 percent indicates that it is generally contracting.

A Manufacturing PMI^® above 47.5 percent, over a period of time, generally indicates an expansion of the overall economy. Therefore, the May Manufacturing PMI^® indicates the overall economy grew for the 19th straight month. “The past relationship between the Manufacturing PMI^® and the overall economy indicates that the May reading (54 percent) corresponds to a 2.2-percent increase in real gross domestic product (GDP) on an annualized basis,” says Spence.

THE LAST 12 MONTHS

New Orders
ISM^®‘s New Orders Index expanded in May with a reading of 56.8 percent, an increase of 2.7 percentage points compared to April’s reading of 54.1 percent. “Of the six largest manufacturing industries, four (Computer & Electronic Products; Chemical Products; Transportation Equipment; and Machinery) reported increased new orders. Demand sentiment was positive in May, and for a second straight month, there was a 1.6-to-1 ratio of positive to negative comments,” says Spence. A New Orders Index above 51.9 percent, over time, is generally consistent with an increase in the Census Bureau’s series on manufacturing orders (in constant 2000 dollars).

The 14 manufacturing industries that reported growth in new orders in May, in order, are: Nonmetallic Mineral Products; Printing & Related Support Activities; Paper Products; Electrical Equipment, Appliances & Components; Textile Mills; Primary Metals; Miscellaneous Manufacturing; Computer & Electronic Products; Furniture & Related Products; Chemical Products; Transportation Equipment; Plastics & Rubber Products; Machinery; and Fabricated Metal Products. The only industry reporting a decline in new orders in May is Wood Products.

Production
The Production Index expanded in May for the seventh month in a row, registering 54.3 percent, a 0.9-percentage point increase compared to April’s reading of 53.4 percent. “Of the six largest manufacturing industries, five (Transportation Equipment; Machinery; Computer & Electronic Products; Food, Beverage & Tobacco Products; and Chemical Products) reported increased production. Panelists had a 1.75-to-1 ratio of positive to negative comments regarding output,” says Spence. An index above 52 percent, over time, is generally consistent with an increase in the Federal Reserve Board’s Industrial Production figures.

The 14 industries reporting growth in production during the month of May — listed in order — are: Printing & Related Support Activities; Textile Mills; Nonmetallic Mineral Products; Primary Metals; Electrical Equipment, Appliances & Components; Miscellaneous Manufacturing; Plastics & Rubber Products; Paper Products; Fabricated Metal Products; Transportation Equipment; Machinery; Computer & Electronic Products; Food, Beverage & Tobacco Products; and Chemical Products. The only industry reporting a decrease in production in May is Wood Products.

Employment
ISM^®‘s Employment Index registered 48.6 percent in May, 2.2 percentage points higher than April’s reading of 46.4 percent. “The index posted its 32nd consecutive month of contraction after expanding in September 2023. Since January 2023, the Employment Index has contracted in 40 of 41 months. Of the six big manufacturing industries, three (Computer & Electronic Products; Transportation Equipment; and Machinery) reported higher levels of employment in May. The panelist comment ratio of hiring to managing/reducing head counts was 1 to 1 in May,” says Spence. An Employment Index above 50.3 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) data on manufacturing employment.

Of the 18 manufacturing industries, nine reported employment growth in May, in the following order: Printing & Related Support Activities; Wood Products; Computer & Electronic Products; Furniture & Related Products; Nonmetallic Mineral Products; Plastics & Rubber Products; Transportation Equipment; Electrical Equipment, Appliances & Components; and Machinery. The five industries reporting a decrease in employment in May are: Food, Beverage & Tobacco Products; Chemical Products; Fabricated Metal Products; Miscellaneous Manufacturing; and Textile Mills.

Supplier Deliveries^†
Delivery performance of suppliers to manufacturing organizations was slower in May for the sixth consecutive month after one month of faster deliveries. “The Supplier Deliveries Index registered 60.6 percent, the same as in April and a repeat of its highest reading since May 2022 (65.7 percent). Of the six big industries, five (Computer & Electronic Products; Food, Beverage & Tobacco Products; Chemical Products; Machinery; and Transportation Equipment) reported slower supplier deliveries,” says Spence. A reading below 50 percent indicates faster deliveries, while a reading above 50 percent indicates slower deliveries.

The 14 manufacturing industries reporting slower supplier deliveries in May, in order, are: Computer & Electronic Products; Nonmetallic Mineral Products; Plastics & Rubber Products; Textile Mills; Food, Beverage & Tobacco Products; Chemical Products; Paper Products; Fabricated Metal Products; Machinery; Miscellaneous Manufacturing; Furniture & Related Products; Electrical Equipment, Appliances & Components; Primary Metals; and Transportation Equipment. No industry reported faster deliveries in May.

Inventories
The Inventories Index registered 49.9 percent in May, up 0.9 percentage point compared to the reading of 49 percent in April. “Of the six big industries, five (Petroleum & Coal Products; Machinery; Transportation Equipment; Food, Beverage & Tobacco Products; and Chemical Products) expanded inventories in May,” says Spence. An Inventories Index greater than 44.5 percent, over time, is generally consistent with expansion in the Bureau of Economic Analysis (BEA) figures on overall manufacturing inventories (in chained 2000 dollars).

Of 18 manufacturing industries, the nine reporting higher inventories in May — in the following order — are: Textile Mills; Petroleum & Coal Products; Paper Products; Electrical Equipment, Appliances & Components; Machinery; Transportation Equipment; Miscellaneous Manufacturing; Food, Beverage & Tobacco Products; and Chemical Products. The six industries reporting lower inventories in May — listed in order — are: Nonmetallic Mineral Products; Wood Products; Computer & Electronic Products; Plastics & Rubber Products; Fabricated Metal Products; and Primary Metals.

Customers’ Inventories^†
ISM^®‘s Customers’ Inventories Index remained in “too low” territory in May, with reading of 42.7 percent, an increase of 3.6 percentage points compared to the 39.1 percent reported in April. (For more information about the Customers’ Inventories Index, see the “Data and Method of Presentation” section below.)

The two industries that reported that customers’ inventories were too high in May are: Textile Mills; and Miscellaneous Manufacturing. The 10 industries reporting customers’ inventories as too low in May, in order, are: Furniture & Related Products; Machinery; Electrical Equipment, Appliances & Components; Primary Metals; Food, Beverage & Tobacco Products; Fabricated Metal Products; Transportation Equipment; Computer & Electronic Products; Chemical Products; and Wood Products. Six industries reported no change in customers’ inventories in May compared to April.

Prices^†
The ISM^® Prices Index registered 82.1 percent in May, a decrease of 2.5 percentage points compared to its April reading of 84.6 percent, indicating raw materials prices increased for the 20th straight month. Five of the six largest manufacturing industries — Chemical Products; Machinery; Food, Beverage & Tobacco Products; Computer & Electronic Products; and Transportation Equipment — reported price increases in May. “The Prices Index reading is still being driven by (1) increases in steel and aluminum prices that impact the entire value chain, (2) tariffs applied to many imported goods and (3) increases in petroleum-based products as a result of the Middle East conflict. Higher prices were reported by 66.3 percent of respondents in May, down 4 percentage points from April’s 70.3 percent,” says Spence. A Prices Index above 52.8 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) Producer Price Index for Intermediate Materials.

In May, the 16 industries that reported paying increased prices for raw materials, in order, are: Furniture & Related Products; Nonmetallic Mineral Products; Paper Products; Plastics & Rubber Products; Printing & Related Support Activities; Textile Mills; Fabricated Metal Products; Chemical Products; Electrical Equipment, Appliances & Components; Machinery; Miscellaneous Manufacturing; Food, Beverage & Tobacco Products; Computer & Electronic Products; Primary Metals; Transportation Equipment; and Wood Products. No industries reported paying decreased prices for raw materials in May.

Backlog of Orders^†
ISM^®‘s Backlog of Orders Index registered 52.2 percent in May, an increase of 0.8 percentage point compared to the April reading of 51.4 percent. Of the six largest manufacturing industries, three (Computer & Electronic Products; Machinery; and Transportation Equipment) reported expansion in order backlogs in May.

The nine industries reporting higher backlogs in May — listed in order — are: Furniture & Related Products; Nonmetallic Mineral Products; Textile Mills; Electrical Equipment, Appliances & Components; Computer & Electronic Products; Plastics & Rubber Products; Machinery; Fabricated Metal Products; and Transportation Equipment. The three industries reporting lower backlogs in May are: Wood Products; Food, Beverage & Tobacco Products; and Chemical Products. Six industries reported no change in backlog of orders in May as compared to April.

New Export Orders^†
ISM^®‘s New Export Orders Index registered 50.6 percent, up 2.7 percentage points from April’s reading of 47.9 percent, marking a return to expansion territory. “For every positive comment on exports, there were two negative comments,” says Spence.

Of the 18 manufacturing industries, the five that reported growth in new export orders in May are: Primary Metals; Chemical Products; Miscellaneous Manufacturing; Computer & Electronic Products; and Transportation Equipment. The eight industries that reported a decrease in new export orders in May — in the following order — are: Wood Products; Printing & Related Support Activities; Textile Mills; Plastics & Rubber Products; Food, Beverage & Tobacco Products; Fabricated Metal Products; Electrical Equipment, Appliances & Components; and Machinery.

Imports^†
ISM^®‘s Imports Index increased in May to 53 percent, a 2.7-percentage point increase compared to April’s reading of 50.3 percent.

The eight industries reporting higher imports in May — in the following order — are: Printing & Related Support Activities; Wood Products; Electrical Equipment, Appliances & Components; Miscellaneous Manufacturing; Transportation Equipment; Machinery; Food, Beverage & Tobacco Products; and Fabricated Metal Products. The three industries that reported lower volumes in May are: Textile Mills; Paper Products; and Chemical Products. Seven industries reported no change in imports in May compared to April.

^†The Supplier Deliveries, Customers’ Inventories, Prices, Backlog of Orders, New Export Orders, and Imports indexes do not meet the accepted criteria for seasonal adjustments.

Buying Policy
The average commitment lead time for Capital Expenditures in May was 171 days, a decrease of 3 days compared to April. The average lead time in May for Production Materials was 81 days, the same as April. The average lead time for Maintenance, Repair and Operating (MRO) Supplies was 48 days, an increase of two days compared to April.

Posted: June 1, 2026

Source: Institute for Supply Management