April Manufacturing ISM Report On Business: PMI at 62.4%
Friday, May 06, 2005
(Tempe, Arizona) — Economic activity in the manufacturing sector grew in April for the 11th consecutive month, while the overall economy grew for the 30th consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business. The report was issued today by Norbert J. Ore, C.P.M., chair of the Institute for Supply Management Manufacturing Business Survey Committee and group director, strategic sourcing and procurement, Georgia-Pacific Corporation. "The manufacturing sector continued to improve in April. While New Orders contracted slightly compared to last month, Production moved upward, and Employment grew at a faster rate. The PMI has now been above 60 percent for six consecutive months." ISM's Backlog of Orders Index indicates that order backlogs increased in April, and the Employment Index grew for the sixth consecutive month. ISM's Prices Index indicates that manufacturers once again experienced higher prices in their purchases, and at the highest rate since November 1979. The New Export Orders and Import Indexes continue to grow, with Imports accelerating at a faster rate in April. In reviewing comments from the survey respondents, it is apparent that the manufacturing sector continues to improve. However, there are still a number of companies in various industries that have yet to benefit from the recovery. Persistent themes are concerns for availability of ferrous and non-ferrous metals, and escalating costs in a market that is still resistant to higher consumer prices. ISM's PMI registered 62.4 percent in April, a decrease of 0.1 percentage point when compared to 62.5 percent in March. ISM's New Orders Index declined 0.7 percentage point from 65.7 percent in March to 65 percent in April. ISM's Production Index increased 1.5 percentage points from 65.5 percent in March to 67 percent in April. The ISM Employment Index is at 57.8 percent for April, an increase of 0.8 percentage point when compared to the 57 percent reported in March. ISM's Supplier Deliveries Index registered 67.1 percent, 0.8 percentage point lower than March's 67.9 percent. ISM's Inventories Index registered 44.8 percent in April, down from the 48.3 percent reported in March. ISM's Customers' Inventories Index for April is at 40.5 percent, an increase of 1 percentage point compared to the March reading of 39.5 percent. ISM's Prices Index in April is 88 percent, 2 percentage points higher than the 86 percent reported in March. ISM's Backlog of Orders Index increased 3 percentage points, registering 66.5 percent in April compared to 63.5 percent in March. ISM's New Export Orders Index registered 61 percent, a decrease of 1 percentage point from March's 62 percent. ISM's Imports Index increased 1.7 percentage points to 58.5 percent in April, up from 56.8 percent in March. "The second quarter is off to a very strong start. Many respondents indicate that order backlogs are growing for the first time in several years. The list of metals up in price is quite extensive — almost every category of product has seen price movement," said Ore. All responding industries reported growth: Apparel; Paper; Furniture; Industrial & Commercial Equipment & Computers; Transportation & Equipment; Primary Metals; Instruments & Photographic Equipment; Textiles; Glass, Stone & Aggregate; Petroleum; Miscellaneous*; Electronic Components & Equipment; Wood & Wood Products; Rubber & Plastic Products; Chemicals; Tobacco; Fabricated Metals; Printing & Publishing; and Food. "Acetone; Adhesives; Alcohol; Aluminum; Brass; Carbon Steel; Chemicals; Copper and Copper Products; Corrugated Cartons; Diesel Fuel; Electronic Assemblies; Electronic Components; Energy; Ethylene; Fasteners; Flash Memory; Freight; Fuel Oil; Fuel Surcharges; Gasoline; HDPE; Lumber; Natural Gas; Nylon; Packaging Materials; Pallets; Paper; Particle Board; Petroleum-Based Products; Plastics; Plastic Resin; Polyethylene; Polypropylene Resins; Propylene; Resin; Soybean; Stainless Steel; Stainless Steel Products; Steel; Steel Products; Styrene; Transportation; Wire; Wood Products; and Zinc are the commodities listed as up in price. The commodities listed in short supply include Aluminum; Cold Rolled Steel; Copper; Electronic Components; Hot Rolled Steel; Memory Products; Stainless Steel; and Steel. The only commodity reported down in price is Caustic Soda," Ore stated.