Business confidence high - manufacturing, PMI index data

U.S. manufacturing sector grew in May led by a rebound in new orders, albeit marginal, that led to faster growth in production and employment, final data from the purchasing managers' survey by S&P Global showed Monday.

The seasonally adjusted S&P Global US Manufacturing Purchasing Managers' Index rose to 51.3 in May from the 50.0 no-change mark in April.

The final PMI reading came in above the flash score of 50.9.

A reading above 50 suggest growth in the factory activity. The PMI reading signaled a modest improvement in the health of the manufacturing sector, the fourth in the past five months, S&P Global said.

New export orders grew at the fastest pace in two years, exceeding the rise in total orders amid signs of improving demand in Europe, and growth in new orders in Asia, Canada and Mexico.

Employment rose for the fifth consecutive month, and at the sharpest pace since July 2023. The increase reflected positive expectations as well as the filling of previously vacant positions.

The survey also showed that input cost inflation accelerated for the third month in a row to hit the highest level since April 2023. Increased costs were attributed to higher prices for aluminium and copper and metals, and higher fuel costs feeding through to rising transportation prices.

Firms reacted to rising inflationary pressures with hikes in selling prices, but those were the slowest pace in five months.

Business confidence improved and better expectations regarding the outlook led to more hiring, a renewed rise in buying activity and a build-up of stocks of finished goods.