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Manufacturing PMI® at 49.2%; April 2024 Manufacturing ISM® Report On Business®New Orders and Backlogs Contracting; Production Growing; Employment Contracting; Supplier Deliveries Faster; Raw Materials Inventories Contracting; Customers' Inventories Too Low; Prices Increasing; Exports Contracting; Imports Growing TEMPE, Ariz., May 1, 2024 /PRNewswire/ -- Economic activity in the manufacturing sector contracted in April after one month of expansion following 16 consecutive months of contraction, 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® (ISM®) Manufacturing Business Survey Committee: "The Manufacturing PMI® registered 49.2 percent in April, down 1.1 percentage points from the 50.3 percent recorded in March. The overall economy continued in expansion for the 48th month after one month of contraction in April 2020. (A Manufacturing PMI® above 42.5 percent, over a period of time, generally indicates an expansion of the overall economy.) The New Orders Index moved back into contraction territory after one month of expansion, registering 49.1 percent, 2.3 percentage points lower than the 51.4 percent recorded in March. The April reading of the Production Index (51.3 percent) is 3.3 percentage points lower than March's figure of 54.6 percent. The Prices Index registered 60.9 percent, up 5.1 percentage points compared to the reading of 55.8 percent in March. The Backlog of Orders Index registered 45.4 percent, down 0.9 percentage point compared to the 46.3 percent recorded in March. The Employment Index registered 48.6 percent, up 1.2 percentage points from March's figure of 47.4 percent. "The Supplier Deliveries Index figure of 48.9 percent is 1 percentage point lower than the 49.9 percent recorded in March. (Supplier Deliveries is the only ISM® Report On Business® index that is inversed; a reading of above 50 percent indicates slower deliveries, which is typical as the economy improves and customer demand increases.) The Inventories Index registered 48.2 percent, the same reading as in March. "The New Export Orders Index reading of 48.7 percent is 2.9 percentage points lower than the 51.6 percent registered in March. The Imports Index continued in expansion territory, registering 51.9 percent, 1.1 percentage points lower than the 53 percent reported in March and February. In the last three months, the Imports Index has been at its highest levels since July 2022 (54.4 percent)." Fiore continues, "The U.S. manufacturing sector dropped back into contraction after growing in March, the first time since September 2022 that the sector reported expansion. Although demand improvement slowed, output remains positive and inputs stayed accommodative. Demand softening was reflected by the (1) New Orders Index dropping back into contraction, offset by fewer comments regarding 'softening,' (2) New Export Orders Index indicating contraction after two months of expansion, offset by panelists' more optimistic comments, (3) Backlog of Orders Index remaining in moderate contraction territory, dropping back slightly compared to March, and (4) Customers' Inventories Index at the 'just right' level, neutral for future production. Output (measured by the Production and Employment indexes) moderated compared to March, with a combined 2.1-percentage point downward impact on the Manufacturing PMI® calculation. Panelists' companies slightly increased their production levels month over month, and head-count reductions continued (but showed signs of easing) in April. Inputs — defined as supplier deliveries, inventories, prices and imports — continued to accommodate future demand growth. The Supplier Deliveries Index dropped marginally, continuing in 'faster' territory, and the Inventories Index was flat (the same reading as in March) and in slight contraction territory. The Prices Index moved further upward into strong expansion (or 'increasing') territory, as commodity driven costs continue to climb. Imports continued to grow, at a slower rate in April. "Demand remains at the early stages of recovery, with continuing signs of improving conditions. Production execution continued to expand in March, but at a slower rate of growth than in prior months. Suppliers continue to have capacity but work to improve lead times, due to their raw material supply chain disruptions. Thirty-four percent of manufacturing gross domestic product (GDP) contracted in April, up from 30 percent in March. More importantly, the share of sector GDP registering a composite PMI® calculation at or below 45 percent — a good barometer of overall manufacturing weakness — was 4 percent in April, higher than the 1-percent figure in March, but an indication of better health than the 27 percent recorded in January. Among the top six industries by contribution to manufacturing GDP in April, none had a PMI® at or below 45 percent," says Fiore. The nine manufacturing industries reporting growth in April — in order — are: Nonmetallic Mineral Products; Printing & Related Support Activities; Primary Metals; Textile Mills; Electrical Equipment, Appliances & Components; Petroleum & Coal Products; Transportation Equipment; Chemical Products; and Plastics & Rubber Products. The seven industries reporting contraction in April — in the following order — are: Miscellaneous Manufacturing; Machinery; Furniture & Related Products; Wood Products; Food, Beverage & Tobacco Products; Fabricated Metal Products; and Paper Products. WHAT RESPONDENTS ARE SAYING
Manufacturing ISM® Report On Business® data is seasonally adjusted for the New Orders, Production, Employment and Inventories indexes. COMMODITIES REPORTED UP/DOWN IN PRICE AND IN SHORT SUPPLY Commodities Up in Price Commodities Down in Price Commodities in Short Supply Note: The number of consecutive months the commodity is listed is indicated after each item. APRIL 2024 MANUFACTURING INDEX SUMMARIES Manufacturing PMI® A Manufacturing PMI® above 42.5 percent, over a period of time, generally indicates an expansion of the overall economy. Therefore, the April Manufacturing PMI® indicates the overall economy grew for the 48th straight month after one month of contraction (April 2020). "The past relationship between the Manufacturing PMI® and the overall economy indicates that the April reading (49.2 percent) corresponds to a change of plus-1.9 percent in real gross domestic product (GDP) on an annualized basis," says Fiore. THE LAST 12 MONTHS
New Orders The eight manufacturing industries that reported growth in new orders in April — in the following order — are: Printing & Related Support Activities; Nonmetallic Mineral Products; Plastics & Rubber Products; Paper Products; Primary Metals; Computer & Electronic Products; Chemical Products; and Fabricated Metal Products. The five industries reporting a decline in new orders in April are: Textile Mills; Food, Beverage & Tobacco Products; Machinery; Electrical Equipment, Appliances & Components; and Miscellaneous Manufacturing.
Production The eight industries reporting growth in production during the month of April, in order, are: Plastics & Rubber Products; Petroleum & Coal Products; Nonmetallic Mineral Products; Transportation Equipment; Chemical Products; Computer & Electronic Products; Electrical Equipment, Appliances & Components; and Fabricated Metal Products. The three industries reporting a decrease in production in April are: Wood Products; Food, Beverage & Tobacco Products; and Machinery. Seven industries reported no change in production in April.
Employment Of 18 manufacturing industries, the four industries reporting employment growth in April are: Textile Mills; Nonmetallic Mineral Products; Transportation Equipment; and Computer & Electronic Products. The seven industries reporting a decrease in employment in April, in the following order, are: Paper Products; Miscellaneous Manufacturing; Furniture & Related Products; Plastics & Rubber Products; Fabricated Metal Products; Machinery; and Chemical Products. Seven industries reported no change in employment in April as compared to March.
Supplier Deliveries† The four manufacturing industries reporting slower supplier deliveries in April are: Nonmetallic Mineral Products; Primary Metals; Food, Beverage & Tobacco Products; and Electrical Equipment, Appliances & Components. The eight industries reporting faster supplier deliveries in April — in the following order — are: Wood Products; Miscellaneous Manufacturing; Plastics & Rubber Products; Fabricated Metal Products; Computer & Electronic Products; Machinery; Transportation Equipment; and Chemical Products. Six industries reported no change in delivery performance in April compared to March.
Inventories Of 18 manufacturing industries, four reported higher inventories in April: Wood Products; Electrical Equipment, Appliances & Components; Nonmetallic Mineral Products; and Food, Beverage & Tobacco Products. The eight industries reporting lower inventories in April — in the following order — are: Miscellaneous Manufacturing; Computer & Electronic Products; Furniture & Related Products; Plastics & Rubber Products; Fabricated Metal Products; Chemical Products; Machinery; and Transportation Equipment. Six industries reported no change in raw materials inventories in April compared to March.
Customers' Inventories† The five industries reporting customers' inventories as too high in April are: Textile Mills; Wood Products; Food, Beverage & Tobacco Products; Miscellaneous Manufacturing; and Plastics & Rubber Products. The seven industries reporting customers' inventories as too low in April, in order, are: Primary Metals; Paper Products; Fabricated Metal Products; Machinery; Chemical Products; Transportation Equipment; and Computer & Electronic Products.
Prices† In April, the 13 industries that reported paying increased prices for raw materials, in order, are: Printing & Related Support Activities; Textile Mills; Petroleum & Coal Products; Plastics & Rubber Products; Chemical Products; Nonmetallic Mineral Products; Paper Products; Electrical Equipment, Appliances & Components; Fabricated Metal Products; Primary Metals; Computer & Electronic Products; Furniture & Related Products; and Machinery. The only industry reporting paying decreased prices for raw materials in April is Food, Beverage & Tobacco Products.
Backlog of Orders† Of 18 manufacturing industries, the three that reported growth in order backlogs in April are: Wood Products; Nonmetallic Mineral Products; and Plastics & Rubber Products. The 11 industries reporting lower backlogs in April — in the following order — are: Textile Mills; Furniture & Related Products; Primary Metals; Paper Products; Transportation Equipment; Miscellaneous Manufacturing; Machinery; Computer & Electronic Products; Food, Beverage & Tobacco Products; Electrical Equipment, Appliances & Components; and Chemical Products.
New Export Orders† The five industries reporting growth in new export orders in April are: Wood Products; Plastics & Rubber Products; Miscellaneous Manufacturing; Food, Beverage & Tobacco Products; and Electrical Equipment, Appliances & Components. The six industries reporting a decrease in new export orders in April — in the following order — are: Furniture & Related Products; Primary Metals; Computer & Electronic Products; Transportation Equipment; Machinery; and Chemical Products. Six industries reported no change in exports in April.
Imports† The six industries reporting an increase in import volumes in April — listed in the following order — are: Wood Products; Paper Products; Fabricated Metal Products; Food, Beverage & Tobacco Products; Transportation Equipment; and Chemical Products. The five industries that reported lower volumes of imports in April are: Primary Metals; Furniture & Related Products; Plastics & Rubber Products; Computer & Electronic Products; and Machinery. Seven industries reported no change in imports in April compared to March.
†The Supplier Deliveries, Customers' Inventories, Prices, Backlog of Orders, New Export Orders, and Imports indexes do not meet the accepted criteria for seasonal adjustments. Buying Policy
About This Report The data presented herein is obtained from a survey of manufacturing supply executives based on information they have collected within their respective organizations. ISM® makes no representation, other than that stated within this release, regarding the individual company data collection procedures. The data should be compared to all other economic data sources when used in decision-making. Data and Method of Presentation Survey responses reflect the change, if any, in the current month compared to the previous month. For each of the indicators measured (New Orders, Backlog of Orders, New Export Orders, Imports, Production, Supplier Deliveries, Inventories, Customers' Inventories, Employment and Prices), this report shows the percentage reporting each response, the net difference between the number of responses in the positive economic direction (higher, better and slower for Supplier Deliveries) and the negative economic direction (lower, worse and faster for Supplier Deliveries), and the diffusion index. Responses are raw data and are never changed. The diffusion index includes the percent of positive responses plus one-half of those responding the same (considered positive). The resulting single index number for those meeting the criteria for seasonal adjustments (Manufacturing PMI®, New Orders, Production, Employment and Inventories) is then seasonally adjusted to allow for the effects of repetitive intra-year variations resulting primarily from normal differences in weather conditions, various institutional arrangements, and differences attributable to non-moveable holidays. All seasonal adjustment factors are subject annually to relatively minor changes when conditions warrant them. The Manufacturing PMI® is a composite index based on the diffusion indexes of five of the indexes with equal weights: New Orders (seasonally adjusted), Production (seasonally adjusted), Employment (seasonally adjusted), Supplier Deliveries, and Inventories (seasonally adjusted). Diffusion indexes have the properties of leading indicators and are convenient summary measures showing the prevailing direction of change and the scope of change. A Manufacturing PMI® reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally declining. A Manufacturing PMI® above 42.5 percent, over a period of time, indicates that the overall economy, or gross domestic product (GDP), is generally expanding; below 42.5 percent, it is generally declining. The distance from 50 percent or 42.5 percent is indicative of the extent of the expansion or decline. With some of the indicators within this report, ISM® has indicated the departure point between expansion and decline of comparable government series, as determined by regression analysis. The Manufacturing ISM® Report On Business® survey is sent out to Manufacturing Business Survey Committee respondents the first part of each month. Respondents are asked to report on information for the current month for U.S. operations only. ISM® receives survey responses throughout most of any given month, with the majority of respondents generally waiting until late in the month to submit responses to give the most accurate picture of current business activity. ISM® then compiles the report for release on the first business day of the following month. The industries reporting growth, as indicated in the Manufacturing ISM® Report On Business® monthly report, are listed in the order of most growth to least growth. For the industries reporting contraction or decreases, those are listed in the order of the highest level of contraction/decrease to the least level of contraction/decrease. Responses to Buying Policy reflect the percent reporting the current month's lead time, the approximate weighted number of days ahead for which commitments are made for Capital Expenditures; Production Materials; and Maintenance, Repair and Operating (MRO) Supplies, expressed as hand-to-mouth (five days), 30 days, 60 days, 90 days, six months (180 days), a year or more (360 days), and the weighted average number of days. These responses are raw data, never revised, and not seasonally adjusted. ISM ROB Content Except as explicitly and expressly permitted by ISM, you are strictly prohibited from creating works or materials (including but not limited to tables, charts, data streams, time-series variables, fonts, icons, link buttons, wallpaper, desktop themes, online postcards, montages, mashups and similar videos, greeting cards, and unlicensed merchandise) that derive from or are based on the ISM ROB Content. 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About Institute for Supply Management® (ISM®) The full text version of the Manufacturing ISM® Report On Business® is posted on ISM®'s website at www.ismrob.org on the first business day* of every month after 10:00 a.m. ET. The one exception is in January when the report is released on the second business day of the month. The next Manufacturing ISM® Report On Business® featuring May 2024 data will be released at 10:00 a.m. ET on Monday, June 3, 2024. *Unless the New York Stock Exchange is closed.
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