WASHINGTON, June 1 (Xinhua) -- The U.S. manufacturing sector saw growth in May, as companies and suppliers continue to struggle to meet increasing levels of demand, the Institute for Supply Management (ISM) reported Tuesday.
The Purchasing Managers' Index (PMI) stood at 61.2 percent, up 0.5 percentage points from the April reading. Any reading above 50 percent indicates the manufacturing sector is generally expanding.
The May PMI indicates expansion in the overall economy for the 12th month in a row after contracting in March, April, and May last year, according to the ISM report.
Timothy Fiore, chair of the ISM's manufacturing business survey committee, noted that optimistic sentiment increased, with 36 positive comments for every cautious comment, compared to an 11-to-1 ratio in April.
Fiore, however, said committee panelists reported that their companies and 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 the manufacturing economy," Fiore said.
"Worker absenteeism, short-term shutdowns due to part shortages, and difficulties in filling open positions continue to be issues that limit manufacturing-growth potential," he continued.
Sarah House and Tim Quinlan, economists at Wells Fargo Securities, wrote in an analysis that the May ISM manufacturing index surprised on the upside in terms of the headline measure, "but the sub-components moved in both directions."
The New Orders Index registered 67 percent, increasing 2.7 percentage points from the April reading. Supplier Deliveries Index in May rose by 3.8 percentage points to reach 78.8 percent, the highest level in decades.
The Backlog of Orders Index registered 70.6 percent, 2.4 percentage points higher compared to the April reading. The Production Index, meanwhile, fell by 4 percentage points to 58.5 percent.
"While any figure north of 50 signals expansion, the slowing in this measure (Production Index) has to be infuriating for factories seeing a once-in-a-lifetime demand surge but are unable to take full advantage of it for lack of parts," House and Quinlan said.
The Employment Index registered 50.9 percent, 4.2 percentage points lower than the April reading, according to the ISM report. Fiore said panelists continue to note "significant difficulties" in attracting and retaining labor at their companies' and suppliers' facilities.
"The manufacturing recovery has transitioned from first addressing demand headwinds, to now overcoming labor obstacles across the entire value chain," said Fiore. Enditem
