The April 2016 Manufacturing ISM Report on Business reported the April PMI registered at 50.8 percent, a decrease of 1.0 percent from March. The PMI reading above 50 indicates that manufacturing activity on a national basis expanded for the second month in a row after five consecutive months of contraction. The growth in manufacturing was slower than expected by economists polled by Reuters who forecast an increase to 51.4 percent. The overall economy grew for the 83rd consecutive month.
The 12 month average for the PMI was 50.4 with a high of 53.1 in June 2015 and a low of 48.0 in December 2015.
The new orders and production indexes declined slightly in April, down 2.5 points to 55.8 percent and 1.1 percentage point to 54.2 percent, respectively. The raw materials inventory index also decreased by 1.5 points to register 47 percent. Customer inventories were reported as too low at a reading of 46 percent.
Employment levels were up slightly for the month.
The prices index grew 7.5 points to 59 percent indicating higher prices for raw materials. Backlogs held steady, declining just 0.5 percentage points.
The index for new export orders increased 0.5 percent from March, showing expansion for the second month following a contraction reading of 46.5 in February. The import index increased 0.5 percentage points to register at the unchanged neutral mark of 50.
Primary Metals and Fabricated Metal products were among the 11 of 18 manufacturing industries reporting growth in April.
Survey respondents had the following comments:
• “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)
• “Market is starting to pick up as expected.” (Wood Products)
Below is a graph showing the history of the ISM Manufacturing Index. You will need to view the graph on our website to use it’s interactive features, you can do so by clicking here. If you need assistance with either logging in or navigating the website, please contact our office at 800-432-3475 or info@SteelMarketUpdate.com.
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