By Lucia Mutikani
(Reuters) – The American manufacturing industry contracted for the third consecutive month in May and the suppliers took more time to deliver their inputs because of customs duties, which could announce imminent shortages of certain products.
Manufacturing activity in the United States, which represents 10.2% of the US economy, unexpectedly fell to 48.5 in May, its lowest level for six months, shows the monthly survey of the Institute for Supply Management (ISM) published Monday, against a figure of 48.7 the previous month.
The economists interviewed by Reuters awaited an average figure of 49.5.
The threshold of 50 separates growth and contraction of the activity.
However, the index remains above 42.3 which, according to the ISM, ultimately indicates an expansion of the economy as a whole.
The survey suggests that the manufacturing industry, which depends strongly on imported raw materials, has not benefited from the de -escalation of trade tensions between the administration of President Donald Trump and Beijing.
According to economists, back and forth in the application of customs duties prevent companies from anticipating.
An American commercial court last week blocked some of the surcharges announced by the White House, believing that the president had exceeded his authority by imposing them. A federal court of appeal, however, temporarily restored customs duties the next day.
The delivery index of suppliers of the ISM survey increased from 55.2 in April to 56.1 in May. An index greater than 50 indicates a slowdown in deliveries.
An extension of suppliers’ delivery times is normally associated with a healthy economy, but in this case, the slowdown probably indicates strangulation bottlenecks in supply chains linked to customs duties.
The ISM had found delays in the customs clearance of goods in the ports in April and the port operators reported a drop in volumes of goods.
The sub-index of new orders increased to 47.6 in May after 47.2 in April, while the price index paid by the manufacturers fell to 69.4, against 69.8 the previous month.
Employment in factories increased 46.8 in May against 46.5 in April.
(Written by Lucia Mutikani, Diana Mandiá, edited by Blandine Hénault)
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