US ISM Manufacturing PMI edged lower from 49.0 to 48.7 in April, slightly better than expectations of 47.9, but still firmly in contraction territory.
The report paints a mixed picture beneath the headline: new orders improved modestly from 45.2 to 47.2, signaling tentative stabilization in demand. But production dropped sharply from 48.3 to 44.0, marking the eighth straight month of contraction. Employment remained weak, rising only slightly from 44.7 to 46.5, with job losses continuing across the sector.
Export activity was a particular drag, with new export orders plunging from 49.6 to 43.1, reflecting growing external headwinds and perhaps early signs of tariff impacts. Imports also fell back into contraction, dipping from 50.1 to 47.1.
The rise in the Prices Index—from 69.4 to 69.8—marks the highest level since mid-2022 and reflects growing cost pressures, especially from tariffs, which are now being passed through to buyers amid longer supplier delivery times and rising inventories.
According to ISM, the overall backdrop suggests weakening demand and output amid rising input costs, “not considered positive for economic growth. ISM estimates the current PMI level aligns with a modest 1.8% annualized GDP growth rate.
