US ISM Manufacturing PMI dropped from 57.1 to 55.4 in April, below expectation of 57.5. Looking at some details, new orders dropped from 53.8 to 53.5. Production dropped from 54.5 to 53.6. Employment dropped quite notably from 56.3 to 50.9. Supplier deliveries rose further from 65.4 to 67.2. Prices also dropped from 87.2 to 84.6.
ISM said: “Manufacturing performed well for the 23rd straight month, with demand registering slower month-over-month growth (likely due to extended lead times and decades-high material price increases) and consumption softening (due to labor force constraints). Overseas partners are experiencing COVID-19 impacts, creating a near-term headwind for the U.S. manufacturing community. Fifteen percent of panelists’ general comments expressed concern about their Asian partners’ ability to deliver reliably in the summer months, up from 5 percent in March.”
“The past relationship between the Manufacturing PMI® and the overall economy indicates that the Manufacturing PMI® for April (55.4 percent) corresponds to a 2.3-percent increase in real gross domestic product (GDP) on an annualized basis.”
