After last month’s surprising strength in the ISM Manufacturing survey, the April report showed a larger than expected decline. Heading into the report, economists were expecting the headline reading to come in at a level of 51.4 from last month’s reading of 51.8, but the actual reading showed a decline down to 50.8. In spite of the disappointment, though, the Manufacturing sector is still exhibiting overall growth, which is more than we could say for the five months prior to March.
The table below summarizes the individual subsectors of April’s ISM Manufacturing report, showing their m/m and y/y changes. Like the headline index, six of the ten subcomponents declined in April with Customer Inventories and New Orders showing the largest declines, although in the case of New Orders, the index is still at 55.8 which is indicative of solid growth. On the upside, the two notable sectors were Prices Paid and Employment. Prices Paid increased 7.5 points to 59.0 — the highest level since September 2014. On a related note, respondents to this month’s survey also noted price increases in 19 different commodities, which was the highest reading since May 2014. With regards to Employment, that component is still under 50 but did reach its best level since November. Finally, on a y/y basis, the breadth of April’s report was somewhat better with six components increasing and just four declining.