WASHINGTON -- (AFP) - US manufacturing activity slowed sharply in April according to the The Institute for Supply Management’s Index. The group’s manufacturing purchasing managers index fell to 50.7 in April from 51.3 in March, holding only slightly above 50, the line between growth and contraction.
New orders and production rose, but employment and prices fell sharply, by more than four points.
"Comments from the panel indicate a range of strong/steady growth, to flat/declining volumes, depending upon the particular industry," said Bradley Holcomb, chair of the ISM committee in charge of the survey.
Of the 18 manufacturing industries surveyed, 14 reported growth in April, led by furniture, printing and electrical equipment and appliances. The three industries reporting contraction were wood products; food, beverage and tobacco products; and chemical products.
A report by payrolls firm ADP earlier in the day showed manufacturing shed 10,000 jobs in April, the only industry it surveyed where employment shrank.
“Employment in manufacturing has come to a halt and inventory cutting is underway to bring production in line with shipments,” said Daniel J. Meckstroth, Chief Economist for the Manufacturers Alliance for Productivity and Innovation (MAPI). “The ISM report points out that imports are growing faster than exports. Because U.S. manufacturing imports are substantially larger than exports, the trade impact on domestic manufacturing is now decidedly negative.
“Manufacturing activity was relatively strong in the first three months of this year, led by pent-up demand for motor vehicles and the housing rebound,” Meckstroth concluded.
“Some of the production growth came from unwanted inventory accumulation; manufacturers are now in the process of adjusting inventories back down, leading to a soft patch in industrial activity that may persist for a few months," Meckstroth added. The fundamentals, however, point to moderate 3% manufacturing industrial production growth this year—slightly faster than the overall economy, but not much.”