The PMI indicates that the manufacturing economy grew in April for the 35th consecutive month as it registered 57.3 percent, an increase of 2.1 percentage points when compared to March”s reading of 55.2 percent. A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.
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A PMI in excess of 42 percent, over a period of time, generally indicates an expansion of the overall economy.
The April PMI indicates that both the overall economy and the manufacturing sector are growing.
“”The past relationship between the PMI and the overall economy indicates that the average PMI for January through April (56 percent) corresponds to a 4.8 percent increase in real gross domestic product (GDP). In addition, if the PMI for April (57.3 percent) is annualized, it corresponds to a 5.3 percent increase in real GDP annually.””
New Orders
ISM”s New Orders Index registered 57.6 percent in April. The index is 0.8 percentage point lower than the 58.4 percent registered in March. April is the 36th consecutive month the index has exceeded 50 percent. A New Orders Index above 51.1 percent, over time, is generally consistent with an increase in the Census Bureau”s series on manufacturing orders (in constant 2000 dollars). Fourteen industries reported increases during April: Miscellaneous*; Primary Metals; Transportation & Equipment; Electronic Components & Equipment; Wood & Wood Products; Printing & Publishing; Industrial & Commercial Equipment & Computers; Rubber & Plastic Products; Paper; Glass, Stone & Aggregate; Fabricated Metals; Furniture; Instruments & Photographic Equipment; and Food.
Production
ISM’s Production Index registered 60.4 percent in April, 2.9 percentage points higher than the 57.5 percent reported in March. April is the 36th consecutive month of growth in the index. An index above 50 percent, over time, is generally consistent with an increase in the Federal Reserve Board’s Industrial Production figures. Of the industries reporting in April, 14 registered growth: Miscellaneous; Fabricated Metals; Industrial & Commercial Equipment & Computers; Wood & Wood Products; Transportation & Equipment; Apparel; Primary Metals; Chemicals; Electronic Components & Equipment; Food; Furniture; Instruments & Photographic Equipment; Printing & Publishing; and Rubber & Plastic Products.
Employment
ISM’s Employment Index expanded for the 11th consecutive month in April. The index registered 55.8 percent in April compared to 52.5 percent in March, an increase of 3.3 percentage points. An Employment Index above 48.9 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) data on manufacturing employment.
The 12 industries reporting growth in employment during April are: Miscellaneous*; Glass, Stone & Aggregate; Apparel; Food; Transportation & Equipment; Primary Metals; Electronic Components & Equipment; Industrial & Commercial Equipment & Computers; Printing & Publishing; Fabricated Metals; Chemicals; and Furniture.
Supplier Deliveries
The delivery performance of suppliers to manufacturing organizations was slower for the 34th consecutive month in April. ISM”s Supplier Deliveries Index for April registered 57.7 percent, an increase of 4.6 percentage points when compared to March”s reading of 53.1 percent. A reading above 50 percent indicates slower deliveries. The 12 industries reporting slower supplier deliveries in April are: Primary Metals; Instruments & Photographic Equipment; Glass, Stone & Aggregate; Miscellaneous; Textiles; Electronic Components & Equipment; Printing & Publishing; Fabricated Metals; Furniture; Transportation & Equipment; Industrial & Commercial Equipment & Computers; and Chemicals.
Inventories
Manufacturers’ inventories reversed a 12-month trend in April as ISM”s Inventories Index registered 51.3 percent, a 2.6 percentage point increase when compared to March’s reading of 48.7 percent. An Inventories Index greater than 42.2 percent, over time, is generally consistent with expansion in the Bureau of Economic Analysis’ (BEA) figures on overall manufacturing inventories (in chained 2000 dollars).
The nine industries reporting higher inventories in April are:
Textiles; Apparel; Miscellaneous*; Wood & Wood Products; Fabricated Metals; Electronic Components & Equipment; Industrial & Commercial Equipment & Computers; Transportation & Equipment; and Chemicals.
Customers’ Inventories
The ISM Customers’ Inventories Index is at 46.5 percent in April, 1.5 percentage points lower than the 48 percent reported in March. The index indicates that respondents believe their customers do not have sufficient inventories on hand (inventories are too low) at this time. This is the 59th consecutive month that the index has registered below 50 percent.
Four industries reported higher customers’ inventories during April: Textiles; Instruments & Photographic Equipment; Miscellaneous*; and Food. Prices
In April, the ISM Prices Index was 71.5 percent, indicating manufacturers are paying higher prices on average when compared to March. While 37 percent of supply executives reported paying the same prices and 10 percent reported paying lower prices, the majority of respondents (53 percent) reported that prices were higher than the preceding month.
A Prices Index above 47.1 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) Index of Manufacturers Prices. In April, 14 industries reported paying higher prices: Furniture; Primary Metals; Wood & Wood Products; Fabricated Metals; Transportation & Equipment; Industrial & Commercial Equipment & Computers; Electronic Components & Equipment; Instruments & Photographic Equipment; Paper; Glass, Stone & Aggregate; Printing & Publishing; Chemicals; Miscellaneous*; and Food.
Backlog of Orders
ISM’s Backlog of Orders Index registered 57 percent, indicating manufacturers” backlogs in April are expanding when compared to March. The index is 2.5 percentage points lower than the 59.5 percent reported in March. Of the 86 percent of respondents who report their backlog of orders, 28 percent reported greater backlogs, 14 percent reported smaller backlogs, and 58 percent reported no change from March.
The 11 industries reporting an increase in order backlogs in April are: Apparel; Primary Metals; Transportation & Equipment; Instruments & Photographic Equipment; Industrial & Commercial Equipment & Computers; Miscellaneous; Food; Fabricated Metals; Wood & Wood Products; Electronic Components & Equipment; and Printing & Publishing.
New Export Orders
ISM’s New Export Orders Index registered 53.4 percent in April, a decrease of 3.9 percentage points when compared to March”s index of 57.3 percent. This is the 41st consecutive month of growth in export orders.
The eight industries reporting growth in new export orders in April are: Primary Metals; Printing & Publishing; Transportation & Equipment; Miscellaneous*; Food; Electronic Components & Equipment; Industrial & Commercial Equipment & Computers; and Chemicals.
Imports
Imports of materials by manufacturers grew during April as the Imports Index registered 59 percent. The index increased 2 percentage points when compared to March’s index of 57 percent, indicating a faster rate of growth.
The 11 industries reporting growth in import activity for April are: Miscellaneous; Transportation & Equipment; Apparel; Fabricated Metals; Instruments & Photographic Equipment; Paper; Wood & Wood Products; Industrial & Commercial Equipment & Computers; Electronic Components & Equipment; Food; and Chemicals.
-Miscellaneous is a preponderance of jewelry, toys, sporting goods and musical instruments.
-The Backlog of Orders, Prices, Customers” Inventories and Imports Indexes do not meet the accepted criteria for seasonal adjustments.
Buying Policy
Average commitment leadtime for Capital Expenditures decreased 4 days to 114 days. Average leadtime for Production Materials decreased 3 days to 52 days. Average leadtime for Maintenance, Repair and Operating (MRO) supplies decreased 6 days to 23 days.
Available at:
http://www.ism.ws/about/mediaroom/newsreleasedetail.cfm?ItemNumber=14413
