Economic activity in the manufacturing sector expanded in May, and the overall economy grew for the 109th consecutive month, the Institute for Supply Management reported.

The ISM noted that the PMI rose 1.4% to 58.7% as it nears the 60% mark. The news order index jumped even further, rising 2.5% to 63.7% but it was the production index that had the largest rise, eclipsing the 60% mark by rising 4.3%. The employment index went up 2.1% to 54.2% and the supplier delivers index had a nearly 1% gain, reaching an even 62% for the month.

Meanwhile, the prices index inched forward, hitting 79.5% after being at 79.3% in April. Raw material prices have been increasing for 27-straight months now.

The only index to fall was the inventories index, which slipped 2.7% to 50.2%.

“Demand remains strong, with the new orders index at 60 or above for the 13th straight month, and the customers’ inventories index remaining at very low levels,” said Timothy R. Fiore, chair of the Institute for Supply Management Manufacturing Business Survey Committee. “The backlog of orders index continued expanding, with its highest reading since April 2004, when it registered 66.5%. Consumption, described as production and employment, continues to expand in spite of labor and skill shortages.

“Inputs, expressed as supplier deliveries, inventories and imports, had expansion declines, due primarily to inventory reductions likely caused by supplier performance issues. Lead-time extensions, steel and aluminum disruptions, supplier labor issues and transportation difficulties continue. Export orders expanded at slower rates.

“The prices index is at its highest level since April 2011, when it registered 82.6%. Demand remains robust, but the nation’s employment resources and supply chains continue to struggle. Respondents say price pressure at their companies is causing price-increase discussions as we prepare to enter H2.”

Of the 18 manufacturing industries, 16 reported growth in May, including transportation equipment, electrical equipment and machinery.