The latest report by IHS Markit revealed on Monday the seasonally adjusted IHS Markit final U.S. Manufacturing Purchasing Managers’ Index (PMI) stood at 39.8 in May, up from April’s recent low of 36.1 and unrevised from the earlier released “flash” figure”. The reading signaled second-steepest deterioration in manufacturing operating conditions since April 2009.

Economists had forecast the index to stay unrevised at 39.8.

According to the report, production and new orders fall substantially due to weak client demand amid the COVID19 outbreak. Employment dropped substantially amid signs of excess capacity. In addition, lower input buying and weaker overall demand conditions put pressure on suppliers to lower their prices. Consequently, input costs fell again, in turn helping manufacturers to cut their output charges at a record pace as firms sought to remain competitive.

Chris Williamson, Chief Business Economist at IHS Markit noted: “With increasing numbers of companies restarting production, we should see some improvements in the output trend in coming months, and it was reassuring to see signs of the downturn already starting to ease in May, suggesting April was the eye of the storm as far as the production collapse is concerned.”