A report from
the Institute for Supply Management (ISM) showed on Thursday that the U.S.
manufacturing sector’s activity shrank in April for the second straight month.
The ISM's index
of manufacturing activity - the manufacturing PMI - checked in at 48.7 per cent
in April, down 0.3 percentage point from an unrevised March reading of 49.0 per cent. The latest reading indicated
the steepest contraction in the U.S.
factory sector since November 2024 (48.4).
Economists had anticipated
the indicator to fall to 48.0 per cent.
According to
the report, the New Orders Index jumped 2.0 percentage points to 47.2 per cent
last month but remained in contraction territory for the third consecutive
month. Meanwhile, the Production Index decreased 4.3 percentage
points to 44.0 per cent, slipping further into contraction territory. Elsewhere, the Employment Index increased 1.8 percentage points to 46.5 per cent,
indicating that employment reduced for the third month in a row. The Supplier Deliveries
Index rose 1.7 percentage points to 55.2
per cent, indicating that the delivery performance of suppliers to manufacturing
organisations was slower for a fifth straight month in April. On the price front, the Prices Index went up 0.4 percentage
point to 69.8 per cent, indicating raw materials prices rose for the seventh
straight month after a decrease in September 2024.
Commenting on
the March data, Timothy R. Fiore, Chair of the ISM Manufacturing Business
Survey Committee, noted that demand and production retreated and de-staffing
continued, as panellists' companies responded to an unknown economic
environment. “Prices growth accelerated slightly due to tariffs, causing new order
placement backlogs, supplier delivery slowdowns and manufacturing inventory
growth,” he added.