U.S. Data Pulse: S&P Manufacturing PMI Signals Continued Resilience

Research evidence excerpt

U.S. Data Pulse: S&P Manufacturing PMI Signals Continued Resilience

UpdateM

Manufacturing Resilience Continued as Prices Accelerated

Manufacturing activity expanded in May, according to the S&P Global PMI. The May

manufacturing PMI was 55.3, up 0.8 points from the prior month. The headline increase

points to continued improvement in manufacturing momentum, driven mainly by stronger

employment and higher stocks of purchases

Demand and production continued to be resilient: the output index rose 0.2 points to

56.2, marking its twelfth consecutive month in expansion. The new orders index decreased

1.9 points to 54.6, but still pointing to resilient demand. These are very different signals

from what we just saw in the Philadelphia manufacturing survey.

Labor demand from manufacturers showed strength. The employment index rose 4.1

points to 53.2, marking the first meaningful improvement this year.

Supply chain & inventories: suppliers’ delivery times fell to 40.2, 2.2 points lower than in

April. This is the lowest reading since September 2022. The time taken to deliver inputs to

manufacturers has shown an overall deterioration since mid-2023, despite some

fluctuations. Stocks of purchases ticked up 2.1 points to 53.3, following increases in the

prior two months. We think this reflects stock building and attempts to secure supply and

prices, underscoring ongoing concerns around uncertainty in the Middle East. Backlogs of

work fell 3.5 points to 52. The index suggests a slow and gradual recovery in the

manufacturing sector, with the quarterly average rising above 50 in 1Q26 for the first time

since 2023.

Prices: output and input prices rose for the third consecutive month. The output price

index rose 1.6 points to 63.3, and the input price index increased 11.1 points to 79.5,