Economic activity in the US manufacturing sector continued to contract in May as imports tumbled to their lowest level since 2009.
The Institute for Supply Management's (ISM) manufacturing PMI registered a reading of 48.5 in May, down from April's reading of 48.7. Readings above 50 for this index indicate an expansion in activity, while readings below 50 indicate contraction. The manufacturing sector has been in contraction for most of the past two years.
The import index sank to a reading of 39.9, well below the 47.1 seen in April. The large decrease in imports came as businesses grapple with President Trump's tariff hikes on various countries. While Trump has recently scaled back some of his initial tariffs, a wide swath of levies are still in place.
“Imports continue to contract as demand has reduced the need to maintain import levels from previous months, as well as due to the impact of tariff pricing,” Susan Spence, chair of the ISM Manufacturing Business Survey Committee, said in a release.
Spence later told Yahoo Finance in an interview that the biggest concern among ISM panelists was tariffs, with 86% of the responses mentioning levies in their comments. Some respondents compared the current operating environment to the struggles seen during the pandemic in 2020.
“So the only thing that can help is certainty and whatever is going to finally be happening with the individual countries,” Spence said.
Read more: What Trump's tariffs mean for the economy and your wallet
A separate reading on manufacturing activity from S&P Global, also released on Monday, registered a reading of 52, up from a prior reading of 50.2. But S&P Global chief business economist Chris Williamson wrote in the release that the headline data “masks worrying developments under the hood” of the US manufacturing sector.
“While growth of new orders picked up and suppliers were reportedly busier as companies built up their inventory levels at an unprecedented rate, the common theme was a temporary surge in demand as manufacturers and their customers worry about supply issues and rising prices,” Williamson wrote.
Josh Schafer is a reporter for Yahoo Finance. Follow him on X @_joshschafer.
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