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Figure Heloc 
May manufacturing PMI 51.2 vs 52.0 expectedPrior 51.7April was defined by firms rushing orders to stock up, so naturally May is showing some of that unwinding as new orders placed
with manufacturers declined. The standout details from the report though are that supply chain delays are intensifying as product shortages were
reported, and also input prices rising further to a greater degree.The former sees a further deterioration in vendor times, which was the greatest seen in
four years, as the Middle East conflict continues to weigh. The report points out that: “Panellists
noted that delays on maritime routes were considerable,
product shortages widespread and prices for inputs,
especially for oil and oil-derivatives were rising precipitously.”And on the inflation front: “Prices paid
for inputs by manufacturers rose to the greatest degree for
four years and amongst the strongest rates in the survey
history. The acceleration in inflation seen in the past three
months has also been unprecedented since data were first
collected in early 1998.”As higher input cost inflation becomes more embedded, selling charges also increased on the month as firms look to try and protect their margins further. Of note, the degree of charge inflation remains elevated in the context of the survey history even if a little softer than April’s near three-and-a-half year
high.
This article was written by Justin Low at investinglive.com.
💡 DMK Insight
May’s manufacturing PMI dipped to 51.2, and here’s why that matters: This drop signals a slowdown in manufacturing activity, which could impact broader economic sentiment. With new orders declining, traders should be cautious about sectors reliant on manufacturing, particularly industrials and materials. The uptick in supply chain delays indicates that inflationary pressures might persist, complicating the Fed’s interest rate decisions. If this trend continues, we could see a ripple effect across equities and commodities, especially if firms begin to cut back on production. Keep an eye on the 50 level in PMI as a psychological threshold; falling below could signal contraction. On the flip side, this could present a buying opportunity for those looking at consumer staples or tech, which might benefit from a shift in spending as consumers adapt to tighter supply conditions. Watch for how these dynamics play out in the upcoming earnings reports, particularly from companies in the manufacturing sector.
📮 Takeaway
Monitor the 50 PMI level closely; a drop below could indicate broader economic contraction, impacting sectors like industrials and materials.
