The U.S. manufacturing sector contracted in April, Manufacturing PMI® registered 48.7%, 0.3 percentage points (pp) lower compared to the 49.0% recorded in March, for the second month in a row, following a two-month expansion preceded by 26 straight months of contraction.
Regarding the overall economy, this figure indicates that the economy continued in expansion for the 60th month after one month of contraction in April 2020. (A manufacturing PMI® above 42.3%, over a period of time, generally indicates an expansion of the overall economy.)
The Employment Index registered 46.5% in April, 1.8 pp higher than March’s reading of 44.7%. Prices Index registered 69.8% in April, increasing 0.4 pp compared to the March reading of 69.4%, indicating raw materials prices increased for the seventh straight month after a decrease in September. New Orders Index contracted in April for the third consecutive month after three consecutive months of expansion, registering 47.2%, an increase of 2 pp compared to March’s figure of 45.2%. This reading is below the 12-month moving average (48.5%) for the New Orders Index.
New Export Orders Index contracted for the second month in a row in April after expanding for two consecutive months, registering 43.1% in April, down from March’s reading of 49.6%. This 6.5 pp decrease is the largest since April 2020 when the index dropped 11.3 pp. “The rate of decrease for the New Export Orders Index is the fastest since the coronavirus pandemic, and excluding COVID-19, the reading is the lowest since the Great Recession. “New export orders contracted sharply due to the combination of slow overseas growth as well as the application of counter tariffs applied to a multitude of U.S. manufactured products,” says Timothy Fiore, Chair of the Institute for Supply Management.
Imports Index contracted in April after expanding for three straight months. The April reading of 47.1% is 3 pp lower than the reading of 50.1% reported in March. Before expanding in January, the index contracted for seven months in a row, preceded by five consecutive months of expansion, with 14 straight months of contraction prior to that. “Imports contracted as demand has reduced the need to maintain the same level of imports compared to prior months,” says Fiore.
The Inventories Index registered 50.8% in April, down 2.6 pp compared to the reading of 53.4 percent reported in March.
Read the ISM release.
