The Institute for Supply Management's manufacturing purchasing managers' index (PMI) fell to 55.4 in April, down from 55.7 in the prior month and the lowest rate since July 2020. Readings above 50 signal growth while those below 50 signal contraction. The manufacturing sector has grown for 23 straight months. "The US manufacturing sector remains in a demand-driven, supply chain-constrained environment," ISM said.
Price gains slowed in April, but global energy markets remain unstable amid the war in Ukraine, the institute said.
The new orders index registered 53.5, a 0.3 point drop from the prior month and the lowest since May 2020, when the US was in a deep, brief recession prompted by Covid-19 and related restrictions. The production index fell to 53.6, a 0.9 point drop on the month and also the lowest since May 2020.
The new export order index fell to 52.7, down by half a point from March, as overseas customer demand was suppressed by Covid-19 in Asia and the war in Ukraine, ISM said.
"Hiring and material availability continue to show signs of improvement, but factories are still struggling to hit optimum output rates — primarily due to high levels of employee turnover," ISM said.
The employment index fell by 5.4 points to 50.9, as progress slowed in solving labor shortage problems.
The latest ISM report comes as the Federal Reserve is widely expected to hike its benchmark lending rate by half a percentage point on 4 May to stem inflation running at four-decade highs. The US economy contracted at a 1.4pc annual rate in the first quarter, the first contraction in two years.
The prices index fell by 2.5 points to 84.6, indicating a slowing rate of growth for raw materials prices.
The supplier deliveries index rose by 1.8 points to 67.2, reflecting slower deliveries.
Source: Argus Media
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