Although the nation’s leading manufacturing index remained flat between the months of March and April, most of the trends surrounding that index show growth. Following three months of sluggish activity it appears March may be the bottom of the trough.
The Institute for Supply Management’s domestic manufacturing index, the PMI, registered 51.5 percent in April, the same reading as in March. However, the new orders index registered 53.5 percent, an increase of 1.7 percentage points from the reading of 51.8 percent in March. The production index registered 56 percent, 2.2 percentage points above the March reading of 53.8 percent. The employment index registered 48.3 percent, 1.7 percentage points below the March reading of 50 percent, reflecting contracting employment levels from March. Inventories of raw materials registered 49.5 percent, a decrease of 2 percentage points from the March reading of 51.5 percent. The prices index registered 40.5 percent, 1.5 percentage points above the March reading of 39 percent, indicating lower raw materials prices for the sixth consecutive month.
“While the March and April PMI were equal, both registering 51.5 percent, 15 of the 18 manufacturing industries reported growth in April while only 10 industries reported growth in March, indicating a broader distribution of growth in April among the 18 industries,” said Bradley J. Holcomb, chair of the Institute for Supply Management (ISM) Manufacturing Business Survey Committee.
Of the 18 manufacturing industries, 15 are reporting growth in April in the following order: Nonmetallic Mineral Products; Plastics & Rubber Products; Wood Products; Printing & Related Support Activities; Furniture & Related Products; Fabricated Metal Products; Food, Beverage & Tobacco Products; Paper Products; Miscellaneous Manufacturing; Machinery; Transportation Equipment; Textile Mills; Electrical Equipment, Appliances & Components; Chemical Products; and Primary Metals. The two industries reporting contraction in April are: Apparel, Leather & Allied Products; and Computer & Electronic Products.
Respondents to the ISM's monthly survey said:
- “Low energy costs continue to help the bottom line.” (Food, Beverage & Tobacco Products)
- “Automotive industry is still very strong.” (Fabricated Metal Products)
- “Business holding relatively flat in North America, softening a bit globally.” (Transportation Equipment)
- “Foreign Exchange is reducing revenue, but volume has remained consistent.” (Chemical Products)
- “International shipments still being delayed by the strikes at ports on the West Coast.” (Computer & Electronic Products)
- “Production and orders remain strong and steady.” (Primary Metals)
- “Business conditions are good, with slowly rising demand for our products.” (Miscellaneous Manufacturing)
- “Labor, both skilled and unskilled, remains difficult to find qualified individuals.” (Furniture & Related Products)
- “Continuing to expedite shipments through Vancouver due to ongoing port delays.” (Machinery)
- “Customers perceive that raw materials prices have bottomed out so are now releasing orders.” (Plastics & Rubber Products)
The full report is available at ISM.