Tariffs and trade policy continued to dominate the manufacturing landscape in May, according to the latest PMI survey data from S&P Global.
Amid evidence of client efforts to front-run tariff related price increases and supply chain disruption, new orders to US manufacturers increased. Similar factors led to a survey record increase in stocks of inputs, whilst higher input prices due to tariffs were signaled and output charge inflation was the highest since November 2022. Delivery delays were at their most acute since October 2022.
The headline index from the report, the seasonally adjusted S&P Global US Manufacturing Purchasing Managers’ Index (PMI), posted 52.0 in May.
That was up from readings of 50.2 in the preceding two months and represented solid overall growth which was the best since February’s recent high.
May’s improvement in the PMI was driven by an uplift in new orders and an outsized contribution from input inventories which, in 18 years of data collection, rose at an unprecedented pace.
For new orders, which rose to the strongest degree in three months, demand from within the United States was noted as the primary driver of growth as international sales remained relatively subdued, rising only slightly following April’s steep fall.
In response to higher input costs, factory gate prices were also raised in May, and to the greatest degree since November 2022.
Finally, manufacturers are hopeful of a more stable trading environment in a year’s time, with growing expectations among the panel that disruption to markets caused by tariffs will dissipate in the months ahead.