US Manufacturing as measured by the April 2013 Manufacturing ISM Report On Business® is treading water barely above contraction.
Economic activity in the manufacturing sector expanded in April for the fifth consecutive month, and the overall economy grew for the 47th consecutive month, say the nation’s supply executives in the latest Manufacturing ISM Report On Business®.
ISM at a Glance
| Series Data | Apr Index | Mar Index | Percentage Point Change | Direction | Rate of Change | Trend (Months) |
|---|---|---|---|---|---|---|
| PMI™ | 50.7 | 51.3 | -0.6 | Growing | Slowing | 5 |
| New Orders | 52.3 | 51.4 | +0.9 | Growing | Faster | 4 |
| Production | 53.5 | 52.2 | +1.3 | Growing | Faster | 8 |
| Employment | 50.2 | 54.2 | -4.0 | Growing | Slower | 43 |
| Supplier Deliveries | 50.9 | 49.4 | +1.5 | Slowing | From Faster | 1 |
| Inventories | 46.5 | 49.5 | -3.0 | Contracting | Faster | 2 |
| Customers’ Inventories | 44.5 | 47.5 | -3.0 | Too Low | Faster | 17 |
| Prices | 50.0 | 54.5 | -4.5 | Unchanged | From Increasing | 1 |
| Backlog of Orders | 53.0 | 51.0 | +2.0 | Growing | Faster | 3 |
| Exports | 54.0 | 56.0 | -2.0 | Growing | Slower | 5 |
| Imports | 55.0 | 54.0 | +1.0 | Growing | Faster | 3 |
Synopsis
Manufacturing employment has grown for 43 months. I expect that trend to break next month.
Production was up but inventories were way lower. The drop in inventories, in conjunction with a big slowdown in employment, is likely a leading indicator of future production.
The positive surprise that does not fit into the above assessment is that new orders grew at a faster rate. Next month may be telling. I expect the new order divergence to resolve to the downside as the global economy and the US economy are both slowing.
Mike “Mish” Shedlock
