ISM: Manufacturing Contracts at Slower Pace in April

The ISM’s manufacturing PMI came in at 47.1% in April. Although 0.8 percentage points higher than the previous month, the reading marked the six consecutive month of contraction in the sector, and the fifth month of contraction in the overall economy.

Recall that a PMI reading above 50% indicates general expansion in the manufacturing sector, while a reading below 50% indicates general contraction.

“The US manufacturing sector contracted again; however, the Manufacturing PMI® improved compared to the previous month, indicating slower contraction,” said Timothy R. Fiore, chair of the ISM Manufacturing Business Survey Committee.

“The April composite index reading reflects companies continuing to manage outputs to better match demand for the first half of 2023 and prepare for growth in the late summer/early fall period,” Fiore added.

The ISM survey’s indices showed month-over-month growth in new orders, production, employment, customers’ inventories, prices, new export orders, and imports. Supplier deliveries, inventories, and backlog of orders all saw MoM indice declines.

“We seem to be in a season of contradictions,” commented one panelist from the primary metals business. “Business is slowing, but in some ways, it isn’t. Prices for some commodities are stabilizing, but not for others. Some product shortages are over, others aren’t. Trucking is more plentiful, except when it isn’t. There’s uncertainty one day, but not the next. The next couple of months should provide answers — or not. It’s hard to make projections at the moment.”

By Laura Miller, laura@steelmarketupdate.com