• ISM factory gauge little changed at 48.5 in May after 48.7

• Index of imports declined to lowest level in 16 years

US factory activity contracted in May for a fourth consecutive month and a gauge of imports fell to a 16-year low as firms pulled back in the face of higher tariffs.

The Institute for Supply Management’s manufacturing index edged down 0.2 point last month to 48.5, according to data released Monday. Readings below 50 indicate contraction.

Two of the report's trade-related indexes highlighted the widespread uncertainty caused by the uneven rollout and frequent changes in tariffs. The ISM's import measure dropped 7.2 points, one of the largest monthly slides on record, to 39.9.

That marked a departure from earlier this year when some firms were importing more to get ahead of tariffs. The gauge of exports fell to the lowest level in five years, possibly a reflection of retaliatory tariffs from other nations on US producers.

The confusion over evolving trade policy is also making it difficult on supply managers to efficiently source goods and materials. The ISM's supplier deliveries index climbed to the highest level since June 2022, indicating extended delivery times.

The report also showed the fallout on demand from higher duties. Bookings contracted for a fourth month, and order backlogs shrank at the slowest pace since September 2022.

Government figures last week showed consumer spending barely rose in April after the weakest quarter in nearly two years. Some companies are also pausing investment plans due to the uncertainty surrounding the frantic implementation of additional tariffs.

The survey also indicated higher materials costs remain an issue for producers. The group’s price measure was little changed at a still-elevated 69.4.