Institute for Supply Management Reports on April Manufacturing
On Wednesday, May 1, the Institute for Supply Management (ISM) released the April installment of its Report on Business® for the Manufacturing sector.
Each month ISM surveys private-sector enterprises in order to calculate its Purchasing Managers Index (PMI™). That index stood at 50.7% for April, a drop of 0.6% from the 51.3% level ISM calculated for March (any reading above 50% indicates growth).
The April report marks five consecutive months of expansion among domestic manufacturers. In the larger picture, the overall economy has now registered gains in each of the last 47 months.
In addition to proprietary PMI™ calculations, the monthly ISM assessment is based on benchmarks for new orders, production, employment, inventories, prices, backlogs, and more. With the exception of the inventory figures, each of these assessment markers registered above 50, indicating growth last month.
The New Orders Index grew yet again, adding 0.9% to reach 52.3% and marking a fourth month of growth in new orders. Production, supplier deliveries, order backlogs, and imports each grew relative to their scores in March.
The Employment Index, clocked in at 50.2%, marking “…a decrease of 4 percentage points compared to March’s reading of 54.2 percent,” said Bradley J. Holcomb, Chair of ISM’s Manufacturing Business Survey Committee. “Comments from the panel indicate a range of strong/steady growth, to flat/declining volumes, depending upon the particular industry.”
ISM surveys 18 constituent industries as part of the report; 14 of these reported growth in April, including Electrical Equipment, Fabricated Metal Products, Primary Metals, and Plastics & Rubber Products. The three industries contracting in April were Wood Products, Beverage & Tobacco Products, and Chemical Products.
The news was better from the U.S. Bureau of Economic Analysis. On April 26 the organization released its Real Gross Domestic Product (GDP) figures for the first quarter of 2013. During that period, the BEA says GDP grew at an annualized rate of 2.5%. GDP in the fourth quarter of 2012, by comparison, grew an annualized rate of 0.4% (a 2.1% increase from quarter-to-quarter).