US manufacturing activity expanded for the 10th consecutive month in May.
S&P Global said Monday that the final reading of the US Manufacturing Purchasing Managers' Index (PMI) for May came in at 55.1. The figure is up 0.6 points from the previous month's 54.5 and marks the highest level since May 2022.
The PMI has remained above the 50 threshold for 10 consecutive months. A reading above 50 signals expansion in manufacturing activity, while a reading below 50 indicates contraction.
The figure fell slightly short of market expectations, however. The market consensus compiled by Bloomberg was 55.3.
The latest PMI gain was led by an expansion in production. The increase in the production index was the fastest since April 2022.
However, concerns are emerging that inflationary pressures could intensify again, as the improvement was partly driven by companies stockpiling inventory amid worries over supply chain disruptions and rising raw material prices stemming from the war in the Middle East.
"The headline PMI hit a four-year high, and factory output posted strong growth for a second straight month," said Chris Williamson, chief economist at S&P Global. "Since the outbreak of the war in the Middle East, companies have been building up inventories on concerns over price increases and supply chain disruptions, which is boosting both production and demand."
