Growth at US manufacturers probably slowed for a sixth straight month in May, as excess inventories led factories to hold down production, economists have forecast an industry report to show today.

The Institute for Supply Management's factory index probably fell to 52.1 last month from 53.3 in April, according to the median estimate from 69 economists in a Bloomberg News survey. The projected reading is the lowest since June 2003, when manufacturing started an uninterrupted expansion. Numbers higher than 50 indicate growth. Lower ones mean contraction.

Companies were reluctant to place orders with factories after inventories surged in the first quarter, economists said. Strength in consumer spending and business investment in new equipment make an outright contraction unlikely, they said.

"Manufacturing activity may be losing momentum," said Michael Moran, chief economist at Daiwa Securities America Inc in New York. "Some of the recent sources of restraint, such as inventory adjustment, are likely to be temporary, and thus the index should soon begin to stabilize."

Inventories in the first quarter piled up at the fastest pace in almost five years, suggesting companies intent on keeping down expenses may want to sell from existing stockpiles before ordering more. Companies showed signs of having accomplished that at the start of the second quarter.

Durable goods stockpiles in April showed the smallest gain since January 2004, the Commerce Department said on May 25. Unfilled orders, a gauge of future production, were unchanged after falling 0.2 per cent.

The Federal Reserve Bank of New York said last month that manufacturing in the state unexpectedly plunged in May, contracting for the first time since 2003. Separate measures of manufacturing in the Philadelphia region and the Chicago area declined to two-year lows.

(China Daily 06/02/2005 page12)