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Metalworking activity contracted at a faster rate in May for the second month in a row. May closed at 45.5, down 1.6 points relative to April and down 2.8 points compared to the same month one year ago.

Indications are, indeed, not encouraging, and because accelerated contraction and declines in business optimism span manufacturing segments, odds are that broad-reaching economic factors, specifically interest rates and sustained inflation, are at play.

For the first time in 2024, new orders, production and exports accelerated contraction. Employment and backlog contracted at steady rates, backlog remaining most contracted among all components. Supplier deliveries lengthened again in May at a slightly increased rate, likely a function of continued or new supply chain challenges since new orders do not appear to be stressing the system. Expectations regarding future business remained positive but took a slight downward turn.