April Manufacturing PMI Drops To 9-Month Low

Though still in solid expansion territory, April's PMI declined for a second-straight month and fell below 58.0 for the first time since July 2017.

TEMPE, AZ â€” Economic activity in the manufacturing sector expanded in April, and the overall economy grew for the 108th consecutive month, say the nation’s supply executives in the latest Manufacturing ISM® Report On Business.

The report was issued today by Timothy R. Fiore, CPSM, C.P.M., Chair of the Institute for Supply Management Manufacturing Business Survey Committee:

  • The April PMI registered 57.3 percent, a decrease of 2 percentage points from the March reading of 59.3 percent
  • The New Orders Index registered 61.2 percent, a decrease of 0.7 percentage point from the March reading of 61.9 percent
  • The Production Index registered 57.2 percent, a 3.8 percentage point decrease compared to the March reading of 61 percent
  • The Employment Index registered 54.2 percent, a decrease of 3.1 percentage points from the March reading of 57.3 percent
  • The Supplier Deliveries Index registered 61.1 percent, a 0.5 percentage point increase from the March reading of 60.6 percent
  • The Inventories Index registered 52.9 percent, a decrease of 2.6 percentage points from the March reading of 55.5 percent
  • The Prices Index registered 79.3 percent in April, a 1.2 percentage point increase from the March reading of 78.1 percent, indicating higher raw materials prices for the 26th consecutive month.

Comments from the panel reflect continued expanding business strength. Demand remains strong, with the New Orders Index at 60 or above for the 12th straight month, and the Customers’ Inventories Index remaining at low levels. The Backlog of Orders Index continued expanding, with its highest reading since May 2004, when it registered 63 percent. Consumption, described as production and employment, continues to expand, but has been restrained by labor and skill shortages. Inputs, expressed as supplier deliveries, inventories and imports, declined overall, due primarily to inventory reductions likely led by supplier performance restrictions. Lead time extensions, steel and aluminum disruptions, supplier labor issues, and transportation difficulties continue. Export orders remained strong. The Prices Index is at its highest level since April 2011, when it registered 82.6 percent. In April, price increases occurred across 17 of 18 industry sectors. Demand remains robust, but the nation’s employment resources and supply chains continue to struggle.

Of the 18 manufacturing industries, 17 reported growth in April, in the following order: Wood Products; Electrical Equipment, Appliances & Components; Fabricated Metal Products; Transportation Equipment; Furniture & Related Products; Paper Products; Machinery; Primary Metals; Nonmetallic Mineral Products; Chemical Products; Computer & Electronic Products; Petroleum & Coal Products; Food, Beverage & Tobacco Products; Plastics & Rubber Products; Printing & Related Support Activities; Miscellaneous Manufacturing; and Apparel, Leather & Allied Products. No industry reported a decrease in PMI in April compared to March.


Index Series Index Apr Series Index Mar Percentage Point Change Direction Rate of Change Trend* (Months)
PMI 57.3 59.3 -2.0 Growing Slower 20
New Orders 61.2 61.9 -0.7 Growing Slower 28
Production 57.2 61.0 -3.8 Growing Slower 20
Employment 54.2 57.3 -3.1 Growing Slower 19
Supplier Deliveries 61.1 60.6 +0.5 Slowing Faster 19
Inventories 52.9 55.5 -2.6 Growing Slower 4
Customers’ Inventories 44.3 42.0 +2.3 Too Low Slower 19
Prices 79.3 78.1 +1.2 Increasing Faster 26
Backlog of Orders 62.0 59.8 +2.2 Growing Faster 15
New Export Orders 57.7 58.7 -1.0 Growing Slower 26
Imports 57.8 59.7 -1.9 Growing Slower 15
OVERALL ECONOMY Growing Slower 108
Manufacturing Sector Growing Slower 20

Manufacturing ISM® Report On Business data is seasonally adjusted for the New Orders, Production, Employment and Supplier Deliveries Indexes.
*Number of months moving in current direction.


Month PMI®
Apr 2018 57.3
Mar 2018 59.3
Feb 2018 60.8
Jan 2018 59.1
Dec 2017 59.3
Nov 2017 58.2
Oct 2017 58.5
Sept 2017 60.2
Aug 2017 59.3
Jul 2017 56.5
June 2017 56.7
May 2017 55.5

Average for 12 months - 58.4 
High - 60.8 
Low - 55.5

source: tradingeconomics.com
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