Manufacturing Expansion Slows As April PMI Slides 2.4 Points

The U.S. manufacturing economy continued to expand, although at considerably slower rate as the PMI dipped 2.4 points from March.

TEMPE, AZ β€” Economic activity in the manufacturing sector expanded in April, and the overall economy grew for the 95th consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business.

The report was issued today by Bradley J. Holcomb, CPSM, CPSD, Chair of the Institute for Supply Management (ISM) Manufacturing Business Survey Committee:

  • The April PMI registered 54.8 percent, a decrease of 2.4 percentage points from the March reading of 57.2 percent.
  • The New Orders Index registered 57.5 percent, a decrease of 7 percentage points from the March reading of 64.5 percent.
  • The Production Index registered 58.6 percent, 1 percentage point higher than the March reading of 57.6 percent.
  • The Employment Index registered 52 percent, a decrease of 6.9 percentage points from the March reading of 58.9 percent.
  • Inventories of raw materials registered 51 percent, an increase of 2 percentage points from the March reading of 49 percent.
  • The Prices Index registered 68.5 percent in April, a decrease of 2 percentage points from the March reading of 70.5 percent, indicating higher raw materials prices for the 14th consecutive month, but at a slower rate of increase in April compared with March.

Comments from the panel generally reflect stable to growing business conditions; with new orders, production, employment and inventories of raw materials all growing in April over March.

Of the 18 manufacturing industries, 16 reported growth in April in the following order: Electrical Equipment, Appliances & Components; Textile Mills; Nonmetallic Mineral Products; Furniture & Related Products; Plastics & Rubber Products; Fabricated Metal Products; Printing & Related Support Activities; Machinery; Paper Products; Chemical Products; Food, Beverage & Tobacco Products; Primary Metals; Miscellaneous Manufacturing; Computer & Electronic Products; Petroleum & Coal Products; and Transportation Equipment. The only industry that reported contraction in April compared to March is Apparel, Leather & Allied Products.

Last 12 Months
Month PMI
April 2017 54.8
March 2017 57.2
February 2017 57.7
January 2017 56.0
December 2016 54.5
November 2016 53.5
October 2016 52.0
September 2016 51.7
August 2016 49.4
July 2016 52.3
June 2016 52.8
May 2016 51.0
12-month average 53.6

What Respondents Are Saying

  • "For [the] first time in a long time, revenue was up in Q1 year-over-year. Our customers' businesses are starting to show sustained health." (Apparel, Leather & Allied Products)
  • "Seeing increased orders and new projects." (Chemical Products)
  • "Bookings are slow; however, we did receive a very large government order." (Computer & Electronic Products)
  • "Business is definitely improving. Profit margins are increasing." (Fabricated Metal Products)
  • "Ongoing market strength. While world/political headlines cause personal anxiety, business conditions remain solid." (Miscellaneous Manufacturing)
  • "The poultry market continues to be stronger than anticipated." (Food, Beverage & Tobacco Products)
  • "Continuing to source more raw materials locally and reduce exposure outside U.S." (Machinery)
  • "Military and government spending is remaining strong. Commercial business has been flat to slightly down." (Transportation Equipment)
  • "Our business and outlook are [strong]. We are seeing price increases from suppliers in many categories." (Plastics & Rubber Products)
  • "Business is solid. Pricing pressures on commodities." (Furniture & Related Products)
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