April PMI at same level as March
Growth in new orders and production and general overall growth in the manufacturing industry helped offset declines in employment and raw inventories as the Institute for Supply Management’s (ISM) Purchasing Managers’ Index (PMI) stayed above 50% for the 28th consecutive month. The PMI finished above the overall economic growth level of 43.2% in April, making it 71 straight months the index has finished above that threshold.
The April PMI was at 51.5%, which was the same level as March. This is the first time the PMI has not fallen since December 2014. The dock workers’ strike on the West Coast during the winter had sent the index down during the Winter after a bullish 2014. Comments from committee members, while very positive overall, indicate that they are still feeling the impact of the dock workers’ slowdown as well as the turbulent global economy.
The indices were a mixed bag in April with New Orders jumping 1.7 percentage points to 53.5% and the Production Index increasing 2.2 percentage points to 56%, which signal strong growth. However, the employment index dropped 1.7 percentage points to 48.3% and raw materials dropped two percentage points to 49.5%.
"While the March and April PMI were equal, both registering 51.5%, 15 of the 18 manufacturing industries reported growth in April while only 10 industries reported growth in March, indicating a broader distribution of growth in April among the 18 industries," said Bradley Holcomb, chairman of the ISM’s Business Survey Committee, in a statement.
Among the comments from committee members are:
- "Low energy costs continue to help the bottom line." (Food, Beverage & Tobacco Products)
- "Automotive industry is still very strong." (Fabricated Metal Products)
- "Business holding relatively flat in North America, softening a bit globally." (Transportation Equipment)
- "Foreign Exchange is reducing revenue, but volume has remained consistent." (Chemical Products)
- "International shipments still being delayed by the strikes at ports on the West Coast." (Computer & Electronic Products)
- "Production and orders remain strong and steady." (Primary Metals)
- "Business conditions are good, with slowly rising demand for our products." (Miscellaneous Manufacturing)
- "Labor, both skilled and unskilled, remains difficult to find qualified individuals." (Furniture & Related Products)
- "Continuing to expedite shipments through Vancouver due to ongoing port delays." (Machinery)
- "Customers perceive that raw materials prices have bottomed out so are now releasing orders." (Plastics & Rubber Products)