NEW YORK - The overall economy grew for the twelfth straight time after seven months of contraction, while the manufacturing sector expanded for the ninth time after eighteenth months of contraction, the Institute for Supply Management reported this morning.
According to the ISM’s monthly report on business, the ISM index jumped to 60.4 in April from 59.6 in March.
Economists polled by Thomson Reuters predicted the index would rise to 60.0.
An index reading below 50 signals a slowing economy, while a level above 50 suggests expansion. A reading of 50 shows the sector was unchanged in the month.
“The manufacturing sector grew for the ninth consecutive month during April," said Norbert J. Ore, chair of the Institute of Supply Management's manufacturing business survey committee. “The rate of growth as indicated by the PMI is the fastest since June 2004 when the index hit 60.5 percent. Manufacturers continue to see extraordinary strength in new orders, as the New Orders Index has averaged 61.6 percent for the past 10 months. The signs for employment in the sector continue to improve as the Employment Index registered its fifth consecutive month of growth. Overall, the recovery in manufacturing continues quite strong, and the signs are positive for continued growth.”
The closely watched prices paid index grew to 78.0 from 75.0. The employment index was at 58.5, up from 55.1 the prior month.
The production index increased to 66.9 from 61.1, the new orders index rose to 65.7 from 61.5; the supplier deliveries index slipped to 61.3 from 64.9; the export orders index decreased to 61.0 from 61.5; and the imports index rose to 58.0 from 57.0.
The inventories index dropped to 49.4 from 55.3; the customers’ inventories index fell to 33.0 from 39.0; and backlog of orders dipped to 57.5 from 58.0.
Respondents’ comments included:
"Finances continue to be tight, and we are decreasing safety stock levels to reduce inventory." (Electrical Equipment, Appliances & Components)
"Business conditions continue to improve. Actual sales exceeded budget for the third straight month." (Food, Beverage & Tobacco Products)
"Demand from automotive manufacturers has continued to improve month over month." (Fabricated Metal Products)
"We are finally seeing a turnaround." (Primary Metals)
"Upward price pressure still evident." (Chemical Products)
