Manufacturing Continues Expanding in April: ISM

For the fourth consecutive month, economic activity in the manufacturing sector expanded in April, according to the ISM Manufacturing PMI Report. 

The Manufacturing PMI® registered 52.7% in April, the same reading as March.

The overall economy continued to expand for the 18th month in a row. 

"In this second month of the Iran War (at the time of data collection), 31% of the comments were positive and 69% negative, with a positive to negative sentiment ratio of 1 to 2.2," said Susan Spence, chair of the ISM Manufacturing Business Survey Committee. Among comments, the war was mentioned in 47% and tariffs in 18%. 

The Index readings were as follows:

Supplier Deliveries Index indicated slowing performance for the fifth month in a row after one month in 'faster' territory. The reading of 60.6% is up 1.7 percentage points from the 58.9% recorded in March; the index has risen in each of the last five months, meaning delivery times are increasingly slowing. 

Inventories Index registered 49%, up 1.9 percentage points compared to March's reading of 47.1%.

Customers' Inventories Index reading of 39.1% is a 1-percentage point decrease compared to March.

New Export Orders Index reading of 47.9% is 2 percentage points lower than the reading of 49.9% registered in March, making it the second month in a row in contraction territory.

Imports Index registered 50.3%, 2.3 percentage points lower than March's reading of 52.6%.

New Orders Index expanded for the fourth straight month after four straight readings in contraction, registering 54.1%, up 0.6 percentage point compared to March's figure of 53.5%.

Production Index registered 53.4%, which is 1.7 percentage points lower than March's reading of 55.1%.

Prices Index remained in expansion territory, registering 84.6%, a 6.3-percentage point jump from March's reading of 78.3%. In the last three months, the Prices Index has increased 25.6 percentage points to reach its highest level since April 2022 (84.6 %.

Backlog of Orders Index registered 51.4%, down 3 percentage points compared to the 54.4% recorded in March.

Employment Index registered 46.4%, down 2.3 percentage points from March's figure of 48.7%.

What Respondents are Saying

• "Demand for manufactured goods is trending higher versus last year; however, geopolitical uncertainty and rising oil and diesel prices continue to weigh on demand. Many customers are exercising caution and remain in a wait-and-watch mode." [Transportation Equipment]

• "Continued tariffs on products utilized in our product lines are being monitored by the business, with the business working to mitigate or limit tariff risk. Geopolitical risk, especially in the Middle East, as it pertains to commodity and energy markets remains a concern and is being monitored by the business. Supply chain risk concerns pertaining to increased cost and transit time for rerouted shipments due to conflict in the Red Sea, Strait of Hormuz and Suez Canal. These conditions are being monitored by the business and rerouting measures have been implemented where possible." [Transportation Equipment]

• "Continuing fluctuation in U.S. tariffs as well as market constraints for certain materials are affecting our current business. U.S. support of AI-related industry is also in flux which is causing some customer and investment hesitancy." [Computer & Electronic Products]

• "All products tied to crude, polyethylene resin or energy (liquified natural gas) have seen multiple increase spikes tied to the Iran crisis and market supply inflation." [Chemical Products]

• "Revenues are very strong. However, price increases are similar to a few years ago with the supply chain crisis. All imports from China are up 15 percent to 25 percent, which is impossible for us to absorb or to fully pass along. Our suppliers in China are telling us that oil is at an all-time high, which is putting huge challenges on their cost structures." [Chemical Products]