PMI® at 50.8%
New Orders and Production Growing
Employment and Inventories Contracting
Supplier Deliveries Faster
(Tempe, Arizona) — Economic activity in the manufacturing sector expanded in April for the second consecutive month, while the overall economy grew for the 83rd consecutive month, say the nation’s supply executives in the latest Manufacturing ISM® Report On Business®.
The report was issued today by Bradley J. Holcomb, CPSM, CPSD, chair of the Institute for Supply Management® (ISM®) Manufacturing Business Survey Committee. “The April PMI® registered 50.8 percent, a decrease of 1 percentage point from the March reading of 51.8 percent. The New Orders Index registered 55.8 percent, a decrease of 2.5 percentage points from the March reading of 58.3 percent. The Production Index registered 54.2 percent, 1.1 percentage points lower than the March reading of 55.3 percent.
The Employment Index registered 49.2 percent, 1.1 percentage points above the March reading of 48.1 percent. Inventories of raw materials registered 45.5 percent, a decrease of 1.5 percentage points from the March reading of 47 percent. The Prices Index registered 59 percent, an increase of 7.5 percentage points from the March reading of 51.5 percent, indicating higher raw materials prices for the second consecutive month. Manufacturing registered growth in April for the second consecutive month, as 15 of our 18 industries reported an increase in new orders in April (up from 13 in March), and 15 of our 18 industries reported an increase in production in April (up from 12 in March).”
Of the 18 manufacturing industries, 11 are reporting growth in April in the following order: Wood Products; Printing & Related Support Activities; Paper Products; Plastics & Rubber Products; Primary Metals; Fabricated Metal Products; Chemical Products; Machinery; Computer & Electronic Products; Nonmetallic Mineral Products; and Food, Beverage & Tobacco Products. The four industries reporting contraction in April are: Petroleum & Coal Products; Transportation Equipment; Miscellaneous Manufacturing; and Furniture & Related Products.
WHAT RESPONDENTS ARE SAYING …
- “We are still running at capacity. New CapEx for $30 million to increase capacity, but will not be online until 2017.” (Food, Beverage & Tobacco Products)
- “Remaining a bit sluggish overall although showing signs of a pickup in some areas.” (Chemical Products)
- “While oil prices have recovered slightly, the industry as a whole continues to struggle greatly.” (Computer & Electronic Products)
- “Steel prices are increasing, but it is supply-side driven. General economy is plugging along with no big changes. Kind of lackluster.” (Fabricated Metal Products)
- “Auto industry is still going strong.” (Machinery)
- “Sales are firming at the reduced levels we’ve seen this year. We think we have hit a bottom.” (Transportation Equipment)
- “Business conditions are stable. Sales and production rates are steady to improving.” (Miscellaneous Manufacturing)
- “Activity increasing as we move to our busy season.” (Printing & Related Support Activities)
- “Market is starting to pick up as expected.” (Wood Products)
|MANUFACTURING AT A GLANCE
|Customers’ Inventories||46.0||49.0||-3.0||Too Low||Faster||3|
|Backlog of Orders||50.5||51.0||-0.5||Growing||Slower||2|
Manufacturing ISM® Report On Business® data is seasonally adjusted for New Orders, Production, Employment and Supplier Deliveries indexes.