Our Proprietary PRM For May: Strong May Rdg, & April revised higher, continue to

Research evidence excerpt

Our Proprietary PRM For May: Strong May Rdg, & April revised higher, continue to

• CURRENT READING: Our initial PRM’s reading for May is +7.5% above our historical average

PRM reading of +0.7% & implies new orders y-o-y are growing more than inventory y-o-y. Note our

final April reading is +8.1% (vs the initial April reading of +6.9%).

• PRM Cycles: Recall May ‘25 was the first positive reading after 38 consecutive months of negative

readings. The previous downcycle that started in November ’18 had 20 consecutive negative readings.

The cycle that started August ’14 also had 20 consecutive negative readings while the cycle that started

January ’12 had 19 consecutive negative readings. Following June’s brief return to negative territory at

-1.2%, May now marks the 11th consecutive month of positive readings. The previous upcycle that

started August ’20 had 20 consecutive positive readings. The cycle that started October ’16 had 25

consecutive positive readings.

• Geographic Color: When compared to April’s reading for each geography being revised modestly

higher, May saw Asia’s PRM accelerate, reaching an absolute PRM level close to North America.

North America’s absolute level remains the strongest, only modestly below April’s strong reading.

Europe’s May reading slipped back after the modest April improvement, hovering around a zero

reading (with order growth slower a bit troubling when reading tea leaves on end demand/lag war

impact; if a PRM reading slipped a bit but due to still strong orders but inventory built a little faster, at

least one could argue end demand remains solid; in this case we’ll have to watch the order trends from

our contacts/published data; while, conversely, Asia order growth improvement helped drive that

region’s improved PRM).