June 3, 2013 / 2:05 PM / 4 years ago

Manufacturing sector contracts in May: ISM

A machine that makes bubble wrap padded envelopes is pictured at the Wrap-Tite manufacturing facility in Solon, Ohio July 13, 2012. REUTERS/Aaron Josefczyk

NEW YORK (Reuters) - Manufacturing activity contracted in May for the first time in six months as new orders slipped and there was less demand for exports, an industry report showed on Monday.

The Institute for Supply Management (ISM) said its index of national factory activity in May fell to 49.0 from 50.7 in April, short of expectations for 50.7.

A reading below 50 indicates contraction in the manufacturing sector. The last time the ISM manufacturing index fell below 50 was November 2012, shortly after the U.S. east coast was hit by a massive storm.

The gauge for new orders dropped to 48.8 from 52.3, while a measure of employment edged down to 50.1 from 50.2. Production fell to 48.6 from 53.5.

The exports index fell to 51.0 from 54.0, while imports held up relatively better, slipping slightly to 54.5 from 55.0.

Though growth has cooled in recent months, before May the national reading had managed to stay in expansion territory, unlike some regional reports that have shown shrinkage.

Economic growth overall in the second quarter is expected to slow from the first quarter’s 2.4 percent pace.

Reporting by Leah Schnurr; Editing by Chizu Nomiyama

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