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U.S. Manufacturing Update: New Orders, Production and Employment Growing


Manufacturing expanded in April and the general U.S. economy grew for the 108th consecutive month, according to the nation’s supply executives in the latest Manufacturing ISM Report On Business. The April PMI registered at 57.3 percent, a decrease of 2 percentage points from the March reading of 59.3 percent.

The Report On Business measures its data using the Purchasing Manager’s Index (PMI), which is an indicator of economic health in the manufacturing sector. A reading above 50 percent indicates that the manufacturing economy is generally expanding, while below 50 percent indicates that it is generally contracting.

“This indicates strong growth in manufacturing for the 20th consecutive month, led by continued expansion in new orders, production activity, employment and inventories, with suppliers continuing to struggle delivering to demand,” said Timothy R. Fiore, chair of the Institute for Supply Management (ISM) Manufacturing Business Survey Committee.

“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,” Fiore continued. “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.

Commodities Up in Price

Aluminum; caustic soda; copper; corrugate; diesel; electrical components; freight; pallets; polypropylene; hot rolled steel; scrap steel; stainless steel; and wood.

Commodities Down in Price

Soybean oil.

Commodities in Short Supply

Capacitors; electrical components; resistors; and hot rolled steel.

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