U.S. manufacturing activity continued to expand in May, according to data released Monday that was first incorrectly reported as a decline.
The Institute for Supply Management said its manufacturing index rose to 55.4 in May from 54.9 in April, meeting economists’ expectations for a rise to 55.5, according to Reuters.
The manufacturing sector in May expanded for the 12th consecutive month.
The ISM’s initial report that manufacturing activity had fallen to 53.2 was inaccurate, the institute said, sending stocks on a downward spiral. The major indices later recovered with the release of corrected data, with the Dow Jones Industrial Average and S&P 500 index closing up for the seventh time in eight days and at record highs.
“We apologize for this error … Our research team is analyzing our internal processes to ensure that this doesn’t happen again,”said Bradley Holcomb, chair of the ISM committee, in a statement.
ISM said Tuesday it’s still unsure why its computers introduced an error into May’s manufacturing index, but that it will manually check all data in the future.
The revised report showed growth in the manufacturing actually accelerated in May. Prices paid by manufacturers rose, but employment and supplier deliveries fell.
“Comments from the panel reflect generally steady growth, but note some areas of concern regarding raw materials pricing and supply tightness and shortages,” Holcomb said in a statement.
Seventeen of the 18 manufacturing industries surveyed reported growth in May, led by furniture, electrical equipment and primary metals.
“We expect the index to show continued strength as companies ramp up production and continue to make up for time lost to bad weather,” wrote economists at First Trust Advisors in a research note Monday.
No industries reported contraction in May, the report showed.
“Political issues in Russia are not yet impacting our supply of raw materials from Russian suppliers,” said an executive in the computer electronics industry.
Meanwhile a survey respondent in the food, beverage and tobacco product industry said increasing demand is “creating supply and sourcing challenges.”
May marked the 12th consecutive month in which the manufacturing sector grew. A reading of 50 or above for the index reflects expansion in the sector while a reading below 50 means manufacturing is contracting.
“The improving gas prices are positively impacting our short term drilling plans,” said an executive in the petroleum and coal industry.
A report by payrolls firm ADP to be released Wednesday will show whether the economy added or subtracted manufacturing jobs in May.
The Dow Jones Industrial Average Monday closed up 26 points, or 0.2 percent, at a record-high 16744.