While the overall economy grew for the 78th consecutive month, economic activity in the manufacturing sector failed to grow in April, according the latest Manufacturing ISM Report On Business.
The PMI registered 48.6% in April, the same as in March. A reading above 50% indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.
"Manufacturers are in a situation where both new orders and production are slowly declining, but prices continue to rise at highly inflationary rates. Bright spots this month are the growth in the Backlog of Orders Index after six consecutive months of decline, continued strength in new export orders and a reduction in customers' inventories," said Norbert J. Ore, C.P.M., chair of the Institute for Supply Management Manufacturing Business Survey Committee.
Daniel Meckstroth, chief economist for the Manufacturers Alliance/MAPI says that the "manufacturing recession continues but that the severity of the downturn is on the mild side. There is strength in aerospace, mining equipment, medical equipment and supplies, and high tech; stable growth in food; and declines in all household items, construction equipment and materials and motor vehicles industries.
"An important counterweight preventing the manufacturing recession from becoming much worse is that the declining dollar has made United States' exports very competitive in world markets," he added, "but a worrisome factor in the marketplace is the escalating prices of oil, food and metal commodities."