ISM
ISM Manufacturing index ticks higher
  • Prior month
  • Manufacturing PMI 47.1 versus 46.8 last month
  • prices paid 53.2 versus 49.0 estimate and 49.2 last month
  • employment 50.2 versus 46.9 last month
  • new orders 45.7 versus 44.3 last month
  • production 48.9 versus 47.8 last month
  • supply deliveries 44.6 versus 44.8 last month
  • inventories 46.3 versus 47.5 last month
  • customer inventories 51.3 verse 48.9 last month
  • backlog of orders 43.1 versus 43.9 last month
  • new export orders 49.8 versus 47.6 last month
  • imports 49.9 versus 47.9 last month

Highlights:

  • Manufacturing sector contracts for sixth consecutive month
  • Two of the six biggest manufacturing industries register growth: Petroleum & Coal Products and Transportation Equipment
  • Five industries report growth, while 11 industries report contraction in April
  • Prices still a problem. The index returned to expansion after one month in contraction. Price increases for foundational purchased materials like steel, copper, plastics, and diesel continue to put upward pressure on material costs. Four of the top six manufacturing industries reported price increases in April. In April, nine industries reported paying increased prices for raw materials, while seven industries reported paying decreased prices for raw materials.

Most important comments from respondents:

  1. Efforts to de-risk the supply chain due to COVID-19 , reducing inventory, and concerns about electronic components [Computer & Electronic Products].
  2. Burning existing inventory and catching up on orders, employment steady, and possible Q3 improvement in business [Chemical Products].
  3. Pricing pressures and resistance to pass along pricing to end consumers, discounting being considered [Food, Beverage & Tobacco Products].
  4. Monitoring demand to detect negative trends in business [Transportation Equipment].
  5. Heavy customer inventory causing a slowdown in sales orders [Machinery].
  6. Faster deliveries and shorter lead times, potential build rate reductions in H2 2023 [Fabricated Metal Products].
  7. Strong business conditions with growing backlog due to supply chain constraints [Miscellaneous Manufacturing].
  8. Expecting soft business conditions for another two years [Electrical Equipment, Appliances & Components].
  9. Business picking up in automotive and construction industries [Plastics & Rubber Products].
  10. Uncertainty and contradictions in business conditions, making projections difficult [Primary Metals].

The US dollar has moved higher after the higher prices and inflation concerns . The 2-year yield is up about 8 basis points of 4.143%. The 10 year yield is up 7 basis points at 3.521%.

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