Supply Chain Management

Rise in U.S. manufacturing masks underlying weakness

By Reuters

Jun 01, 2016

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U.S. manufacturing grew for a third straight month in May, but factories appeared to be taking in fewer deliveries from their suppliers, which could hamper production in the months ahead.

The Institute for Supply Management (ISM) said its index of national factory activity rose half a percentage point to a reading of 51.3 last month, with a jump in prices paid by factories for raw materials also accounting for the increase.

"The rise in the ISM exaggerates the underlying tone in the U.S. manufacturing sector. While the jump in supplier deliveries is a good thing from an inventory perspective, it is perhaps a signal of weaker production activity ahead," said Millan Mulraine, deputy chief economist at TD Securities in New York.

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