ISM manufacturing improved a little in May, but remains in contraction

US ISM Manufacturing Improves, But No Sign of Post-Corona Recovery Rebound Yet

Posted Monday, June 1, 2020 by
Skerdian Meta • 1 min read

The US ISM manufacturing indicator showed that this sector had been in contraction since August last year until January this year, which came as a result of weakening manufacturing activity across the globe, due to the trade war. In February and March manufacturing resurfaced above contraction, but then the lock-down came from the coronavirus in March and this sector dived again, with the ISM PMI indicator falling to 41.5 points.

That was better than expectations and better than many countries, which was a positive sign that this sector would recover faster in the US. Today’s report showed a bounce, but it missed expectations and he bounce wasn’t too big. This sector still remains in deep contraction, so the USD turned bearish after this report. Below is the US ISM manufacturing report, as well as construction spending for April:

May ISM Manufacturing Index

  • May ISM manufacturing index 43.1 points vs 43.7 expected
  • February ISM manufacturing index was 41.5 points
  • New orders 31.8 vs 27.1 prior
  • Prices paid 40.8 vs 35.3 prior (expected 42.0)
  • Employment 32.1 vs 27.5 prior

US Construction Spending for April

  • Construction spending for April month -2.9% vs. -7.0% estimate
  • Construction spending -2.9% vs. -7.0% estimate
  • Private construction fell -3% in April
  • Private residential construction fell -4.5%
  • Private nonresidential construction fell -1.3%
  • Public construction spending fell -2.5% in April
  • Government construction spending was 25.4% of total in April
  • The prior month was revised to unchanged from +0.9%
Overall the data is better than expectations, but some of the gain was tempered by the revision to unchanged from +0.9%. Still not as bad as previously thought.
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