The “flash” estimate is typically based on approximately 85% to 90% of total PMI survey responses each month and is designed to provide an accurate advance indication of the final PMI data. An above-50 reading denotes general growth, while below 50 signals contraction.
Breaking the index into components, output and payroll proved especially strong for May. The output component increased from 58.2 to 59.6, its fastest growth rate in three years. The numbers signal expansion at a faster rate, according to Markit, which noted that output has risen consistently for more than 4.5 years. The employment index stayed relatively steady month-to-month, declining 0.2 points to 53.5 for another month of growth.
The all-important new orders component also stayed strong, down 0.7 points to 58.2. Work backlogs managed a 0.7-point increase 55.9.
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“The U.S. manufacturing sector continued to gain strength heading into mid-year as supportive demand conditions led to the sharpest month-on-month increase in production for over three years,” said Markit Senior Economist Paul Smith in a statement today. “This provides further confirmation that industry will aid a rebound in U.S. GDP in the second quarter, and other indicators from the survey suggest that the sector has plenty of momentum heading into the summer and beyond.”
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