April 2023 Manufacturing ISM Report On Business Indicates Employment Expanded After Two Months of Contraction

The Manufacturing ISM Report On Business is published monthly by the Institute for Supply Management (ISM), the largest supply management organization in the world, as well as one of the most respected.  Economic activity in the manufacturing sector contracted in April for the sixth consecutive month following a 28-month period of growth, say the nation's supply executives in the latest Manufacturing ISM Report On Business.

The U.S. manufacturing sector contracted in April, as the Manufacturing PMI registered 47.1 percent, 0.8 percentage point higher than the reading of 46.3 percent recorded in March. This is the sixth month of contraction and continuation of a downward trend that began in June 2022.

ISM’s New Orders Index contracted for the eighth consecutive month in April, registering 45.7 percent, an increase of 1.4 percentage points compared to March’s reading of 44.3 percent.

The Production Index registered 48.9 percent in April, 1.1 percentage points higher than the March reading of 47.8 percent, indicating a fifth month of contraction after 30 consecutive months of growth.

ISM’s Employment Index registered 50.2 percent in April, 3.3 percentage points higher than the March reading of 46.9 percent. The index indicated employment expanded after two months of contraction.

The delivery performance of suppliers to manufacturing organizations was faster for a seventh straight month in April, as the Supplier Deliveries Index registered 44.6 percent, 0.2 percentage point lower than the 44.8 percent reported in March. This month’s reading indicates the fastest supplier delivery performance since March 2009, when the index registered 43.2 percent.

The Inventories Index registered 46.3 percent in April, 1.2 percentage points lower than the 47.5 percent reported for March. Manufacturing inventories contracted at a faster rate compared to March.

ISM’s Backlog of Orders Index registered 43.1 percent in April, a 0.8-percentage point decrease compared to March’s reading of 43.9 percent, indicating order backlogs contracted for the seventh consecutive month after a 27-month period of expansion.

The five manufacturing industries that reported growth in April are: Printing & Related Support Activities; Apparel, Leather & Allied Products; Petroleum & Coal Products; Fabricated Metal Products; and Transportation Equipment. The 11 industries reporting contraction in April, in the following order, are: Furniture & Related Products; Wood Products; Nonmetallic Mineral Products; Electrical Equipment, Appliances & Components; Plastics & Rubber Products; Chemical Products; Machinery; Primary Metals; Computer & Electronic Products; Food, Beverage & Tobacco Products; and Miscellaneous Manufacturing.