Tempe’s ISM says US factory activity gathers pace; raw material, labour shortage rise

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Tempe’s ISM says US factory activity gathers pace; raw material, labour shortage rise

Institute for Supply Management (ISM), the oldest and largest supply management group in the world headquartered in Tempe, Arizona, said on Tuesday that its index for US manufacturing activity, one of the centrepieces of US economy accountable for roughly 11.9 per cent of entire economic activity in the United States, perked up in May in context of a rapid rise in domestic demands alongside a robust reopening of the economy.

Nonetheless, raising an alarming bell over factory output growth, ISM had reported a strong build-up in uncompleted works, mostly due to a steep shortage of labours and raw materials. However, as US manufacturing activity had continued to give the economy a leg up amid a sharp rise in domestic demand, addressing to an intensifying shortage of labour and raw materials which would likely to keep a lid on US manufacturing over coming months, the Tempe-based ISM said in the report, “Companies and their suppliers continue to struggle to meet increasing levels of demand…Record-long lead times, wide-scale shortages of critical basic materials, rising commodities prices and difficulties in transporting products are continuing to affect all segments of manufacturing.

US manufacturing activity hoicks in May

In tandem, according to ISM’s survey data released earlier in the day, the supply management group’s index for US national factory activity rose to 61.2 in May, compared to a reading of 60.7 in April, beating an analysts’ estimate of 60.9.

In factuality, an acceleration in vaccination rollouts in the United States that followed a broader reopening of economy alongside an upscaled relaxation in pandemic associated restrictions, had been heightening up domestic demands lately, but a lingering supply bottleneck would likely to add to hindrances in US manufacturing over coming months, suggested the ISM survey report.