A strong increase in activity in US manufacturing has been confirmed. The final May PMI reading of 55.1, compared with the preliminary flash estimate of 55.3, confirms a clear recovery in the sector, although the sources of this growth are not entirely sustainable.
It is worth noting that this is the strongest reading of the index since mid-2022. The data indicate that a significant part of the increase is being driven by inventory accumulation, as companies fear further price increases and disruptions in supply chains.
At the same time, cost pressure remains very high. Raw material prices are rising at the fastest pace in several years, increasing the risk that elevated inflation will persist in the economy. Another negative signal is the continuing decline in exports, weighed down by geopolitical tensions and trade barriers.
As a result, the current strong performance of the manufacturing sector may prove temporary, and a slowdown is likely once the inventory-building effect begins to fade.
Disclaimer: The information contained in this publication is for informational purposes only. It does not constitute financial advice or any other form of advice, is general in nature and is not addressed to any specific recipient. Before using the information for any purpose, independent advice should be sought.
Source: CEO.com.pl
