April 2012 ISM Reports

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The pace of growth in manufacturing sped up slightly in April, with the Institute for Supply Management’s (ISM) PMI rising to 54.8 percent, from 53.4 in February (50 percent is the breakpoint between contraction and expansion). After reciting some report details, Bradley Holcomb, chair of ISM’s Manufacturing Business Survey Committee, wrapped up his comments by saying, “Sixteen of the 18 industries reflected overall growth in April, and the New Orders, Production and Employment Indexes all increased, indicating growth at faster rates than in March.... Comments from the panel generally indicate stable to strong demand, with some concerns cited over increasing oil prices and European stability."
 

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The non-manufacturing sector grew at a slower pace in April, reflected by a 2.5 percentage point drop (to 53.5 percent) in the non-manufacturing index (now known simply as the “NMI”). "Respondents' comments affirm the slowing rate of growth," concluded Anthony Nieves, chair of ISM’s Non-Manufacturing Business Survey Committee. “In addition, they remain concerned about rising fuel costs and the impact on shipping, transportation and petroleum-based product costs.” As shown by the graph above, input prices rose at the same pace for the manufacturing sector but more slowly for the service sector.
 

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A drop in order backlogs was the only change in Wood Products, which shrank in April; other than perhaps higher input prices and expanded imports, the positive news for Paper Products was widespread. Real Estate and Construction both reported expansion in overall activity, while Ag & Forestry contracted.

Prices for gasoline, diesel fuel, lumber and paper products all increased in April. No relevant commodities were either down in price or in short supply.