ISM Manufacturing index for April 52,7 vs 53.0 estimate

• Prior month 52.7
• manufacturing index 52.7 versus 53.0 estimate.
• Prices paid 84.6 versus 80.0 estimate and 78.3 last month.
• Employment index up 46.4 versus 49.0 estimate. Last month 48.7.
• New orders 54.1 versus 53.5 last month.
• Production 53.4 versus 55.1 last month.
• Supplier deliveries 60.6 versus 58.9 last month.
• Inventories 49.0 versus 47.1 last month.
• Backlog of orders 51.4 versus 54.4 last month
• New export orders 47.9 versus 49.9 last month
• Imports 50.3 versus 52.6 last month

Highlights:

• The expansion above 50 was the 18th month in a row.
• New orders expanded for the 4th straight month which followed 4 straight month of contraction.
• Prices were disappointment with a 6.3% jump from March is reading. In the last 3 months price index has increased 25.6% to reach its highest level since April 2022.
• The employment index remains below the 50.0 level indicative of a contraction
• Backlog of orders registered fell by 3 percentage point but remains above the 50 level

Susan Spence, MBA, Chair of the Institute for Supply Management® (ISM®) Manufacturing Business Survey Committee.said:

• “Manufacturing remained in expansion” but growth was steady, not accelerating overall
• “New Orders and Supplier Deliveries improved”, signaling stronger demand and supply constraints
• “Production slowed” while Employment and Inventories stayed in contraction
• “Sentiment remains negative overall” with a 1 to 2.2 positive-to-negative ratio
• “Iran war and tariffs are major themes”, mentioned in 47% and 18% of comments
• “Demand is mixed” → New Orders and Backlogs expanding, but Backlogs declined
• “Export demand remains weak” with New Export Orders still contracting
• “Customer inventories are too low”, which is supportive for future production
• “Production still expanding” (6th straight month) but losing momentum
• “Employment remains weak” with firms focused on managing headcount, not hiring
• “Layoffs and attrition are being used” to control labor costs
• “Input conditions are mixed”
• “Supplier delays are worsening”
• “Prices surged sharply” to highest since April 2022 → strong inflation signal
• “Imports softened”
• “Manufacturing weakness increased slightly” (19% of GDP contracting vs 16%)
• “Severe contraction eased” (share at ≤45 PMI fell to 2%)
• “Major industries still expanding” (4 of top 6 sectors growing)

Employment weak/prices higher is not a good recipe. The Iran war and tariffs remain a big concerns yet despite those headwinds, new orders increased and the expansion is on its 18th month.

This article was written by Greg Michalowski at investinglive.com.