Economic activity in the United States manufacturing sector contracted for the third straight month in May amid mounting COVID-19 fallout, the Institute for Supply Management (ISM) reported Monday.
The Purchasing Managers’ Index (PMI) stood at 43.1 percent in May, up 1.6 percentage points from the April reading, which was the lowest level since April 2009.
Any reading below 50 percent indicates the manufacturing sector is generally contracting.
“Three months into the manufacturing disruption caused by the coronavirus pandemic, comments from the panel were cautious regarding the near-term outlook,” Timothy Fiore, chair of the ISM‘s manufacturing business survey committee, said in a statement.
Noting that the pandemic impacted all manufacturing sectors, Fiore said “May appears to be a transition month, as many panelists and their suppliers returned to work late in the month.”
“However, demand remains uncertain, likely impacting inventories, customer inventories, employment, imports and backlog of orders,” he said.
Among the six biggest industry sectors, Food, Beverage & Tobacco Products remains the only industry in expansion, according to the report. Transportation Equipment, Petroleum & Coal Products, and Fabricated Metal Products continue to contract at “strong levels,” Fiore said.
The United States Commerce Department reported last week that economic activity in the first quarter contracted at an annual rate of 5 percent in a second estimate, 0.2 percentage point lower than the advance estimate.
That downwardly revised figure, however, still does not fully capture COVID-19‘s economic damage, and many analysts believe that the decline in the second quarter is expected to be much deeper.