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Weekly Market Insight
ISM Manufacturing Index and Selected Components*
 June 04, 2012

Source: Institute for Supply Management 		Growth in the manufacturing sector moderated last month as the Institute for Supply Management's purchasing managers index (PMI) fell from 54.8 in April to 53.5 in May, still above the threshold level of 50 that indicates expansion. Details of the report were mixed. Production and employment growth cooled, and exports dropped in response to eurozone turmoil and weakness in emerging markets. Inventories shrank for a second consecutive month, but new orders surged to a 13-month high, widening the gap between inventories and new orders – a proxy for future production – to its highest level since May 2010. The ISM report portrays an industry that continues to defy the global economic headwinds, but the coast is not clear. Other recent manufacturing indicators such as April factory orders and the ISM-Chicago index came in substantially weaker. Upcoming reports will merit close scrutiny to determine the industry’s direction, particularly since manufacturing has been one of the bright spots since the economy began to recover three years ago. Second quarter demand for industrial space, to be released early next month, will provide a further piece of the puzzle.

Need more information? Contact:

Robert Bach
National Director, Market Analytics
312.698.6754