The Manufacturing PMI registered 49.2 percent in April, down 1.1 percentage points from the 50.3 percent recorded in March. PHOTO courtesy Hexagon.
Economic activity in the US manufacturing sector contracted in April after one month of expansion following 16 consecutive months of contraction, say US supply executives in the latest Manufacturing ISM Report On Business.
The report was issued by Timothy R. Fiore, CPSM, C.P.M., Chair of the Institute for Supply Management (ISM) Manufacturing Business Survey Committee.
The Manufacturing PMI registered 49.2 percent in April, down 1.1 percentage points from the 50.3 percent recorded in March. The overall US economy, however, continued in expansion for the 48th month after one month of contraction in April 2020. (A Manufacturing PMI above 42.5 percent, over a period of time, generally indicates an expansion of the overall economy.)
The New Orders Index moved back into contraction territory after one month of expansion, registering 49.1 percent, 2.3 percentage points lower than the 51.4 percent recorded in March. The April reading of the Production Index (51.3 percent) is 3.3 percentage points lower than March’s figure of 54.6 percent. The Prices Index registered 60.9 percent, up 5.1 percentage points compared to the reading of 55.8 percent in March. The Backlog of Orders Index registered 45.4 percent, down 0.9 percentage point compared to the 46.3 percent recorded in March. The Employment Index registered 48.6 percent, up 1.2 percentage points from March’s figure of 47.4 percent.
The Supplier Deliveries Index figure of 48.9 percent is 1 percentage point lower than the 49.9 percent recorded in March. (Supplier Deliveries is the only ISM Report On Business index that is inversed; a reading of above 50 percent indicates slower deliveries, which is typical as the economy improves and customer demand increases.) The Inventories Index registered 48.2 percent, the same reading as in March.
The New Export Orders Index reading of 48.7 percent is 2.9 percentage points lower than the 51.6 percent registered in March. The Imports Index continued in expansion territory, registering 51.9 percent, 1.1 percentage points lower than the 53 percent reported in March and February. In the last three months, the Imports Index has been at its highest levels since July 2022 (54.4 percent).”
“Demand remains at the early stages of recovery, with continuing signs of improving conditions,” commented Fiore. “Production execution continued to expand in March, but at a slower rate of growth than in prior months. Suppliers continue to have capacity but work to improve lead times, due to their raw material supply chain disruptions.”
Thirty-four percent of manufacturing gross domestic product (GDP) contracted in April, up from 30 percent in March. More importantly, the share of sector GDP registering a composite PMI calculation at or below 45 percent — a good barometer of overall manufacturing weakness — was 4 percent in April, higher than the 1-percent figure in March, but an indication of better health than the 27 percent recorded in January. Among the top six industries by contribution to manufacturing GDP in April, none had a PMI at or below 45 percent, says Fiore.
