There were signs that manufacturers intend to boost production schedules in the coming months. Backlogs of work were accumulated at the strongest pace since September 2015 and payroll numbers increased to a greater extent than in the previous month. Moreover, business optimism regarding the year ahead outlook was the highest since February 2015.
In anticipation of greater workloads, manufacturers signaled a robust increase in input buying during May. Pre-production inventories also picked up, with the degree of stock accumulation the largest since the start of 2018.
Meanwhile, latest data signaled intense pressure on supply chains, with average lead-times lengthening to the greatest extent since the survey began in May 2007. Manufacturers widely commented on stretched supplier capacity and logistics delays during the latest survey period. Robust demand for raw materials and rising commodity prices resulted in another steep increase in input costs across the manufacturing sector. The overall rate of input price inflation eased slightly since April, but was still among the fastest seen over the past seven years. Moreover, prices charged by manufacturing companies continued to rise at the strongest rate since June 2011.