Manufacturing decline continues to moderate

May 4, 2009

Economic activity in the manufacturing sector failed to grow in April for the 15th consecutive month, and the overall economy contracted for the seventh consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business®. However, the manufacturing index for April stands at 40.1 percent, more than the expected 38.6; the March index was 36.9.

In the report issued May 1, Norbert J. Ore, CPSM, C.P.M., chair of the Institute for Supply Management™ Manufacturing Business Survey Committee said, "The decline in the manufacturing sector continues to moderate. After six consecutive months below the 40-percent mark, the PMI, driven by the New Orders Index at 47.2 percent, shows a significant improvement. While this is a big step forward, there is still a large gap that must be closed before manufacturing begins to grow once again. The Customers' Inventories Index indicates that channels are paring inventories to acceptable levels after reporting inventories as 'too high' for eight consecutive months. The prices manufacturers pay for their goods and services continue to decline; however, copper prices have bottomed and are now starting to rise. This is definitely a good start for the second quarter."

The only manufacturing industry reporting growth in April is Miscellaneous Manufacturing. The industries reporting contraction in April — listed in order — are: Printing & Related Support Activities; Primary Metals; Apparel, Leather & Allied Products; Textile Mills; Chemical Products; Furniture & Related Products; Petroleum & Coal Products; Fabricated Metal Products; Transportation Equipment; Food, Beverage & Tobacco Products; Plastics & Rubber Products; Electrical Equipment, Appliances & Components; Paper Products; Machinery; Computer & Electronic Products; and Nonmetallic Mineral Products.

The complete report can be found here.