The Purchasing Manager’s Index reading from Markit came in at 54.0 in May, falling from the previous month but beating forecasts.
Economists had expected the index to come in at 53.8, down from 54.5 in April.
The release noted that May saw the slowest rise in new business since January 2014.
Markit chief economist Chris Williamson wrote, “”With manufacturers reporting the smallest rise in new orders since the start of last year, the survey provides further evidence that the strong dollar is hurting the economy. Falling exports and slumping profits were two weak links in the economy during the first quarter and look set to act as ongoing drags in the second quarter.
“While the economy still looks set to rebound from the decline seen in the first quarter, the extent of the second quarter recovery therefore remains highly uncertain and could well disappoint.”
On the brighter side, manufacturing job creation rose at the fastest pace since November 2014, and it was the twenty-third straight month of gains.
The reading is still above 50, the line between expansion and contraction.
The ISM Manufacturing index for May was also released on Monday. It came in at 52.8, rising from April and beating expectations.
Here’s the latest chart of the index: