May 31, 2018 / 1:06 PM / a year ago

U.S. Upper Midwest factory gauge rebounds in May

Steam is seen drifting from a factory over the Hoan Bridge in Milwaukee, Wisconsin, in this February, 6, 2014 file photo. REUTERS/Darren Hauck/Files

(Reuters) - A gauge of factory activity in the U.S. Upper Midwest rose in May, led by jumps in new orders and production after falling the previous two months, according a private survey released on Thursday.

Marquette University and the Institute for Supply Management-Milwaukee said their seasonally adjusted index of manufacturing in the Milwaukee region climbed to 67.90 this month from 58.26 in April.

The index was still short of the 75.24 reached in February, which was the highest point ever since the data series began in 2006.

A reading above 50 indicates regional factory activity is expanding.

“Business is better than last year, but commodity prices, tariffs, and exchange rates are risks to our business this year,” according to a respondent’s reply cited in the latest survey.

On Wednesday, the Federal Reserve’s Beige Book of regional economic conditions showed U.S. manufacturers increased output in late April and early May despite trade tension between the United States and its major trade partners.

The Marquette University and ISM-Milwaukee survey’s component on new orders, a proxy of future activity, increased to 67.90 from 45.54 last month, while its production gauge improved to 71.06 from 59.14.

The barometer on the six-month outlook improved to 75.00 from 50.00 in April.

On the other hand, its employment index tumbled to 58.08 from 76.78, while its price gauge slipped to 5 points to 90.00.

Reporting by Richard Leong in New York; Editing by Chizu Nomiyama and Jeffrey Benkoe

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