The ISM Manufacturing PMI climbed to 54.0 in May 2026, up from 52.7 in each of the previous two months and above market expectations of 53.0. This marked the strongest expansion in the manufacturing sector since May 2022. Growth accelerated across several key components, including new orders (56.8 vs. 54.1), production (54.3 vs. 53.4), and the backlog of orders (52.2 vs. 51.4). Employment continued to contract, but at a slower pace (48.6 vs. 46.4).
Price pressures remained high, although they eased slightly from April’s level (82.1 vs. 84.6). The Supplier Deliveries Index was unchanged at 60.6. At the same time, the Customers’ Inventories Index remained in “too low” territory, though it contracted at a slower rate. A “too low” reading for customers’ inventories is generally viewed as supportive of future production.
“Among comments, the Iran war was mentioned by 42 percent of respondents and tariffs by 18 percent; 57 percent of the panelists cited pricing volatility as a challenge for their companies,” said Susan Spence, Chair of the ISM Manufacturing Business Survey Committee.
