Economists: US manufacturing activity expanding in May masks concerning economic situation.

Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, stated that the rise in the May PMI masked worrying developments in the US manufacturing sector. Although there was a rebound in new orders and suppliers were busier, with businesses increasing inventory levels at an unprecedented pace, the common theme was that the surge in demand was temporary, as manufacturers and their customers were concerned about supply issues and rising prices. Supplier delivery delays reached their highest point since October 2022, and price increases reached their highest point since November 2022, with tariffs being blamed in most cases. So far, small businesses and those targeting consumer markets seem to be most severely affected by tariffs on supply and prices. In a constantly changing tariff environment, uncertainty remains high.