This is How Badly Manufacturing Slowed Versus Wall Street Expectations

The Institute for Supply Management released their monthly report on the manufacturing sector for May 2011, and they fell far short of Wall Street expectations. The Producer Manufacturing Index came in at 53.5 versus analyst expectations for 57.6 (Briefing). Stocks are taking a dump on the news.

According to the report, economic activity in the manufacturing sector increased in May for the 22nd month in a row, and the overall economy grew for the 24th consecutive month.

The report was issued by ISM chair Bradley J. Holcomb:

“The PMI registered 53.5 percent and indicates expansion in the manufacturing sector for the 22nd consecutive month. This month’s index, however, registered 6.9 percentage points below the April reading of 60.4 percent, and is the first reading below 60 percent for 2011, as well as the lowest PMI reported for the past 12 months. Slower growth in new orders and production are the primary contributors to this month’s lower PMI reading. Manufacturing employment continues to show good momentum for the year, as the Employment Index registered 58.2 percent, which is 4.5 percentage points lower than the 62.7 percent reported in April. Manufacturers continue to experience significant cost pressures from commodities and other inputs.”

Fourteen manufacturing sectors showed growth in May, while three contracted. Here they are in descending order of growth:

  1. Nonmetallic Mineral Products (expanded)
  2. Petroleum & Coal Products (expanded)
  3. Machinery (expanded)
  4. Transportation Equipment (expanded)
  5. Computer & Electronic Products (expanded)
  6. Textile Mills (expanded)
  7. Electrical Equipment, Appliances & Components (expanded)
  8. Primary Metals (expanded)
  9. Miscellaneous Manufacturing (expanded)
  10. Paper Products (expanded)
  11. Chemical Products (expanded)
  12. Plastics & Rubber Products (expanded)
  13. Apparel, Leather & Allied Products (expanded)
  14. Fabricated Metal Products (expanded)
  15. Printing & Related Support Activities (contracted)
  16. Furniture & Related Products (contracted)
  17. Food, Beverage & Tobacco Products (contracted)