ISM: Manufacturing growth down again in April

A reading higher than 50% indicates the manufacturing economy is growing, while a reading below that shows contraction.

However, the overall economy continued to expand for the 60th month since last contracting in April 2020, ISM said. (A Manufacturing PMI higher than 42.3%, over a period of time, usually indicates an expansion of the overall economy.)

“In April, US manufacturing activity slipped marginally further into contraction… demand and output weakened while input strengthened further, conditions that are not considered positive for economic growth,” ISM Chair Timothy R. Fiore said in a statement on Tuesday.

The recent seesaw in activity from January through April comes after 26 straight months of contraction.

The New Orders Index remained in “contraction territory” despite sight improvement, registering 47.2% in April vs. 45.2% a month earlier, according to ISM.

Companies continue to “revise production plans downward,” as factory production contracted further in the face of economic headwinds, Fiore said.

Also, he commented that New Export Orders contracted again (43.1 % vs. 49.6%) due to the combination of slow overseas growth and the use of counter tariffs applied to US-manufactured products.

“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,” Fiore said.

In April, overall, fabricated metal products and primary metals were among the 11 manufacturing industries that reported growth.

Executive comments

A fabricated metals executive highlighted the growing concern and impact of tariffs on domestic manufacturing.

“There is a lot of concern about the inflationary impacts from tariffs in our industry. Domestic producers are charging more for everything, because they can,” the executive added.