Afternoon Coffee: PMI for May hits 12th straight month of growth; Coronavirus outbreaks in India, Vietnam affect manufacturing; Spend Matters hosting webinar with Keelvar, Samsung

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Economic activity in the manufacturing sector continued to grow in May, according to the latest Manufacturing ISM Report on Business numbers released today.

The May PMI number registered 61.2%, indicating an expansion in the overall US economy, according to a press release issued by the Institute for Supply Management. May’s reading was up 0.5 percentage points from the April reading of 60.7%. May’s number counts an expansion in the overall economy for the 12th consecutive month because any reading above 50 counts as growth.

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"The manufacturing economy continued expansion in May,” Timothy R. Fiore, Chair of the Institute for Supply Management Manufacturing Business Survey Committee, said in the press release. “Business Survey Committee panelists reported that their companies and suppliers continue to struggle to meet increasing levels of demand.

“Record-long lead times, wide-scale shortages of critical basic materials, rising commodities prices and difficulties in transporting products are continuing to affect all segments of the manufacturing economy. Worker absenteeism, short-term shutdowns due to part shortages and difficulties in filling open positions continue to be issues that limit manufacturing-growth potential."

Surge of COVID-19 cases in India leads to manufacturing issues in multiple industries

A COVID-19 surge in India has led to manufacturing and production issues in multiple industries and regions, according to Supply Chain Dive.

India is the ninth-largest trading partner to the US. It accounted for 2.4% of year-to-date trade in March 2021. Popular imports from the country include organic chemicals, industrial machines, cotton apparel and pharmaceutical preparations, the article said.

While cases have surged throughout the world, so has the impact to manufacturing and supply chains. One issue in India is a shortage of oxygen, which is used to treat coronavirus and in the manufacturing of certain cars.

"In case the situation does not improve in the coming days, other industries relying on oxygen for production may also follow suit and curb production activities due to the imbalance of supply and demand," Jena Santoro, Everstream​'s Manager of Supply Chain Risk Intelligence, wrote in a note to Supply Chain Dive. "As businesses continue to be impacted by the pandemic, prolonged production halts to limit contact between staff and subsequent transmission are likely."

Vietnam's coronavirus outbreak affecting tech suppliers

Another coronavirus outbreak in Vietnam’s industrial provinces is leading factories to operate below capacity in a place where many suppliers of global tech firms are located, according to Reuters.

Vietnam is battling an outbreak that is spreading quickly. More than 3,000 people have been infected in 30 of 63 cities and provinces. Business operations have been affected as areas enter lockdown, which has raised concerns about supply chain disruption, the article said.

"Small to medium-sized enterprises in Bac Ninh and Bac Giang provinces are finding it challenging to operate. It seems many Korean businesses, including big shots like Samsung, could face difficulties very soon if more stringent measures are applied,” Hong Sun, Vice Chairman of the Korean Chamber of Business in Vietnam, told Reuters. "First-tier suppliers are not yet heavily impacted, but certain factories are slowing down and suffering from the fourth wave of COVID-19 in Vietnam."

Spend Matters to host sourcing-optimization webinar with Keelvar and Samsung

Don’t miss when Spend Matters hosts a webinar with Samsung and Keelvar, an intelligence automation solutions provider. Samsung will share a transformation journey of transportation sourcing, and how Keelvar addressed its needs. Mark your calendars for June 8 at 10 a.m. US Eastern time to understand how strategic sourcing can modernize procurement. Learn more about the sourcing optimization webinar on its registration page.

The Spend Matters global monthly newsletter for June goes out soon! Are you on the list? Don't miss out for 2021!

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