Economic activity in the manufacturing sector expanded in April and the overall economy grew for the 108th consecutive month, according to the latest Manufacturing ISM Report On Business. The April Purchasing Manager’s Index was 57.3 percent, down 2 percentage points from March, but well above the 50-point mark indicating growth in the sector.
Manufacturing and supply executives reported growth in new orders, production and employment during the month. The New Orders Index registered 61.2 percent, a decrease of 0.7 percentage point from the March reading of 61.9 percent, and 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 compared to March; this indicates growth in manufacturing employment for the 19th straight month.
Supplier deliveries slowed, inventories grew, and buyers reported higher prices during the month. 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 March, indicating raw materials inventories grew during the month. The Prices Index registered 79.3 percent in April, a 1.2 percentage point increase compared to March, indicating higher raw materials prices for the 26th straight month.
Comments from the Manufacturing Report on Business panel indicated expanding business strength and growing demand, according to Timothy R. Fiore, chairman of the Institute for Supply Management Manufacturing Business Survey Committee. But concerns linger, especially as companies struggle to find skilled labor and deal with supply chain challenges.
“… 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."