The PMI Index for April—the Institute for Supply Management’s gauge of manufacturing activity—dipped 0.8 percentage points to 60.4 in April. Although the figure is down slightly from March’s reading, it still reflects manufacturing expansion. Note: A reading above 50 percent indicates that the manufacturing economy is generally expanding. Furthermore, the April reading indicates the manufacturing sector expanded for the 21st consecutive month.
“The recent trend of rapid growth in the manufacturing sector continued in April as the PMI registered above 60 percent for the fourth consecutive month,” said Norbert J. Ore, CPSM, C.P.M., chair of the Institute for Supply Management Manufacturing Business Survey Committee. “The new orders and production indices continue to drive the PMI, as they have both exceeded 60 percent for five consecutive months. Manufacturing employment appears to have developed significant momentum, as the employment index readings for the first four months of 2011 are the highest readings in the last 38 years.”
Seventeen out of 18 manufacturing industries reported growth in April: Among them: Wood Products; Plastics & Rubber Products; Primary Metals; Transportation Equipment; Fabricated Metal Products; Computer & Electronic Products; Apparel, Leather & Allied Products; Machinery; Textile Mills; Paper Products; Electrical Equipment, Appliances & Components; Nonmetallic Mineral Products; Miscellaneous Manufacturing; Food, Beverage & Tobacco Products; Chemical Products; Printing & Related Support Activities; and Petroleum & Coal Products. (Furniture & Related Products is the only industry reporting contraction in April.)
While the manufacturing sector is definitely performing above most expectations so far in 2011, manufacturers are experiencing significant cost pressures from commodities and other inputs.
Some general comments from PMI survey respondents:
- "Plastic resin product prices are climbing so fast that [suppliers] are attempting to increase prices on orders already accepted but not [yet] delivered." (Chemical Products)
- "Market continues to get stronger month over month. Recovery is faster than anticipated." (Transportation Equipment)
- "Pressure from offshore suppliers continues to mount with exchange rate increases and seasonal demand for capacity." (Miscellaneous Manufacturing)
The full April PMI Index Report is available online.