WASHINGTON, June 3 — US manufacturing activity contracted for the second consecutive month in May, according to industry survey data published today, as demand remained soft.

The Institute for Supply Management’s (ISM) manufacturing index came in at 48.7 per cent last month, remaining below the 50-point mark separating expansion from contraction.

It marked a continuation of a manufacturing slump that started in April, after a positive reading in March snapped 16 months of contraction.

The May data was lower than market expectations, according to Briefing.com, and indicated that the manufacturing contraction is deepening.

"US manufacturing activity continued in contraction,” ISM survey chief Timothy Fiore said in a statement.

"Demand was soft again, output was stable, and inputs stayed accommodative,” he continued.

He added that "demand remains elusive as companies demonstrate an unwillingness to invest due to current monetary policy and other conditions.

Fiore’s comments underscore the challenges that US businesses face as they grapple with the Federal Reserve’s decision to hike interest rates to multi-decade highs in order to tackle high inflation.

"Overall, a delay in Fed rate cuts will likely be a headwind for factory activity in the near term,” High Frequency Economics chief US economist Rubeela Farooqi wrote in a note to clients.

"However, an eventual lowering (of) interest rates and fiscal measures aimed at encouraging investment in domestic manufacturing capacity should be positive for activity over time,” she added.

Seven manufacturing industries — including petroleum and coal products — reported growth last month, while seven others contracted, including computer and electronic products, according to ISM. — AFP