Manufacturing sector reports fourth month of expansion 

Readings above 50% generally point to economic growth in the manufacturing sector. And readings below 50% suggest a decrease in economic activity.   

“In April, US manufacturing activity remained in expansion territory, growing at the same pace as the month before,” said Susan Spence, chair of the ISM Manufacturing Business Survey Committee. “Of the five subindexes that make up the PMI, the New Orders and Supplier Deliveries indexes indicated faster growth compared to the previous month, the Production Index grew at a slower rate, and the Employment and Inventories indexes remained in contraction.”

Spence continued that 47% of survey respondents mentioned the war in Iran as a consideration while 18% commented on tariff concerns. With respect to the war, 31% of the comments were positive and 69% were negative. That’s a positive to negative ratio of 1 to 2.2. Some panelists referenced both topics within a single comment or in mixed sentiment. 

The new orders and backlog of orders indexes and production indexes all expanded. The new export orders index remained in contraction with a two-percentage point decrease. Meanwhile, the customers’ inventories index remains in ‘too low’ territory, contracting at a slightly faster rate.  

A ‘too low’ status for the customers’ inventories is typically positive for future production.  

The price index jumped to 84.6% in April from 78.3% in March, the highest reading since April 2022, when it was also 84.6%. Meanwhile, the imports index decreased 2.3 points compared to March.  

“Looking at the manufacturing economy, 19% of the sector’s gross domestic product (GDP) contracted in April, compared to 16% in March. Of the six largest manufacturing industries, four expanded in April,” said Spence.