US ISM manufacturing PMI rose to 54 in May, up 1.3 points from April and the
highest reading since May 2022, driven by gains in new orders and production.
The index has signaled expansion for five consecutive months. New orders
accelerated to a four-month high and factory output increased. ISM reported
input costs for manufacturers continued to rise sharply; the prices index eased
from its peaks but remained near 2022 highs. ISM cited higher oil and commodity
prices linked to conflict in the Middle East and the temporary closure of the
Strait of Hormuz; oil has pulled back from peak levels but remains well above
pre-conflict levels. ISM also noted stronger AI investment, more favorable tax
policy and reduced trade-policy uncertainty as supporting manufacturing
activity; consumer stockpiling may have contributed to demand.
