Today’s release of the ISM Manufacturing report for the month of April came in unchanged versus March’s reading of 51.5, which was below the consensus forecast of 52.0. With this month’s report, the ISM Manufacturing report hasn’t posted a monthly increase for six straight months. That is the longest drought without a monthly increase in more than a decade (November 2004).
The table below lists the monthly and year/year change in each of the ISM Manufacturing’s sub components. Although the headline index was unchanged this month, breadth was slightly positive with five components increasing, four declining, and one unchanged. While breadth was positive on a month over month basis, half of the components are still in contraction territory. While that sounds alarming, we would note that there have been eight other months in this expansion where five or more components have been below 50 with the most recent occurring in May 2013. This month’s biggest improvements came in Export Orders (+4.0) and Production (+2.2), while Business Inventories (-2.0) and Employment (-1.7) fell the most. While the monthly changes in the ISM sub components were modestly positive, the y/y changes were overwhelmingly negative with all but Customer Inventories declining.
As mentioned above, the Employment component of this month’s report showed one of the largest declines relative to March and at a level of 48.3 is now at its lowest level since September 2009. Thankfully, manufacturing is a small share of the overall economy.