U.S. ISM Manufacturing Index Improves in April
by:Tom Moeller
|in:Economy in Brief
Summary
- Index recovers a bit after hitting three-year low.
- Employment, new orders & production improve.
- Pricing power hits nine-month high.
The U.S. ISM manufacturing index rose to 47.1 during April from 46.3 in March, according to the Institute for Supply Management. The index failed to recover all of the March decline. It stood below the break-even level of 50 for the sixth straight month and it remained under the peak of 63.8 in March 2021. The figure remained at the lowest level since May 2020. The Action Economics Forecast Survey expected 46.5 in April.
Movement amongst the component series was mixed last month. The employment index rose to 50.2 from 46.9, placing it at the highest level since January. The figure recently peaked at 56.9 in March 2021. An increased 17.9% (NSA) of respondents reported higher employment and a lessened 15.6% reported decline.
The new orders index improved to 45.7 in April from 44.3, but remained below 53.8 twelve months earlier. It was the eighth consecutive month below the break-even level of 50. An increased 25.2% (NSA) of respondents reported higher new orders last month while an increased 26.6% reported a decline. The production index rose to 48.9 from 47.8 in March. It stood at 54.4 in April of last year. An increased 24.4% (NSA) of respondents reported higher production levels while a fairly steady 19.6% reported lower output.
Working lower, the inventories series fell to 46.3 from 47.5. It has collapsed from 57.0 in November of 2021. Just 15.1% of respondents added to inventories while 22.5% lowered inventory levels. The supplier deliveries index slipped to 44.6 from 44.8. It represented the quickest pace of product delivery since March 2009.
The prices index improved to 53.2 (NSA) in April from 49.2 in March. It stood well below its high of 92.1 in June of 2021, though it remained above the December 2022 low of 39.4. An increased 26.3% (NSA) of respondents reported higher prices while a lessened 20.0% reported price declines.
In other ISM series, the new export orders index rose to 49.8 in April from 47.6 in March. It remained down from the recent high of 57.1 in February 2022. The imports index rose to 49.9 and recovered its decline from 47.9 in March. It nevertheless was below the high of 61.0 in June 2021. The order backlog index slipped to 43. 1 from 43.9, below the break-even level of 50 for the seventh consecutive month.
The ISM figures are based on responses from over 400 manufacturing purchasing executives from 20 industries, which correspond to their contribution to GDP in 50 states. These data are diffusion indexes where a reading above 50 indicates expansion. The figures from the Institute for Supply Management can be found in Haver's USECON database; further detail is found in the SURVEYS database. The expectations number is available in Haver's AS1REPNA database.
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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