Manufacturing economic activity continued its trend of contraction in May for the seventh consecutive month. The May manufacturing PMI came in at 46.9%, which is 0.2 percentage points lower than in April.
The food, beverage, and tobacco industry was one of 14 that reported contraction during the month. The industry saw a decrease in both new orders and employment, but also lower costs for raw materials and faster supplier deliveries. Food, beverage, and tobacco also reported contracting inventories and that customers’ inventories were too low.
“Pricing seems to be becoming the primary focus of supply and sourcing teams, as customers and consumers are beginning to push back. While inflation is easing on some discretionary goods, high food costs persist across most categories,” one industry respondent said.
Commenting on the conditions as a whole, Timothy R. Fiore, Chair of the ISM Manufacturing Business Survey Committee, said: “The May composite index reading reflects companies continuing to manage outputs to better match demand for the first half of 2023 and prepare for growth in the late summer/early fall period. However, there is clearly more business uncertainty in May.”
