Economic activity in the manufacturing sector expanded in April for the ninth consecutive month, and the overall economy grew for the 12th consecutive month, according to the supply executives surveyed for the latest Manufacturing ISM Report On Business. "Manufacturers continue to see extraordinary strength in new orders, as the New Orders Index has averaged 61.6% for the past 10 months," said Norbert J. Ore, chair of the Institute for Supply Management Manufacturing Business Survey Committee.
"The ISM report for April, with an impressive overall index of 60.4, reveals a U.S. manufacturing recovery that is both strengthening and broadening," said Cliff Waldman, Economist for the Manufacturers Alliance/MAPI. "Notably, 17 of 18 manufacturing industries reported growth in April, with no industry sectors reporting contraction. The demand stimulus for the factory sector revival is unequivocal with new orders accelerating and the new orders index climbing to a torrid 65.7, capping 10 consecutive months of growth. The durability and stability of the expansion does remain an issue, however, as the renewal of contraction in manufacturing inventories suggests a continued adjustment to a post-crisis environment.
"Further, the modest slip in the backlog of orders is a reminder that much of the current strength in factory sector demand is arising from temporary factors such as a sharp inventory swing and fiscal stimulus programs," he added. "The recovery in the U.S. economy that likely began the summer of 2009 is certainly benefiting manufacturing. But it is clearly a weaker rebound than is needed to reverse a difficult labor market situation and housing remains a concern. Combined with the narrow revival in global growth, mostly coming from Asia, these issues raise concerns about visibility beyond the current strength in manufacturing demand and output."