US factory activity unexpectedly expands in May

Manufacturing activity in the US unexpectedly grew in May, according to data released on Wednesday.

The Institute for Supply Management’s index of national factory activity rose to 51.3 from 50.8 in April, beating expectations of a drop to 50.4.

A reading above 50 indicates expansion.

The new orders index came in at 55.7 from 55.8 in April, while the employment index was unchanged at 49.2 and the production index slipped to 52.6 from 54.2.

The index of supplier deliveries rose to 54.1 from 49.1 in April, while the prices index came in at 63.5, up from April’s 59.

“The increase in the ISM manufacturing index to 51.3 in May, from 50.8, is mildly comforting and brings it to a level that has historically been consistent with GDP growth of close to 2% annualised,” said Capital Economics.

“Based on the weakness in the early regional surveys, we had feared the ISM would drop back below the 50 mark.”