April 2024 Manufacturing ISM Report On Business Indicating Order Backlogs Contracted for the 19th Consecutive Month

The Manufacturing ISM Report On Business is published monthly by the Institute for Supply Management (ISM), the largest supply management organization in the world, as well as one of the most respected.  Economic activity in the manufacturing sector contracted in April after one month of expansion following 16 consecutive months of contraction, say the nation's supply executives in the latest Manufacturing ISM Report On Business.

The U.S. manufacturing sector contracted in April, as the Manufacturing PMI registered 49.2 percent, down 1.1 percentage points compared to March’s reading of 50.3 percent. After breaking a 16-month streak of contraction with an expansion in March, the manufacturing sector dropped back into contraction.

ISM’s New Orders Index moved back into contraction in April, registering 49.1 percent, a decrease of 2.3 percentage points compared to March’s reading of 51.4 percent. The New Orders Index hasn’t indicated consistent growth since a 24-month streak of expansion ended in May 2022.

The Production Index pulled back but remained in expansion territory in April, registering 51.3 percent, 3.3 percentage points lower than the March reading of 54.6 percent. The Production Index had been in contraction for 11 of the previous 16 months.

ISM’s Employment Index registered 48.6 percent in April, 1.2 percentage points higher than the March reading of 47.4 percent. The index indicated employment contracted for the seventh month in a row (but at a slower rate in April) after one month of expansion and three months of contraction before that.

Delivery performance of suppliers to manufacturing organizations was marginally faster in April for the second consecutive month after one month of slowing preceded by 16 straight months in “faster” territory. The Supplier Deliveries Index, which registered 48.9 percent, was 1 percentage point lower than the 49.9 percent reported in March.

The Inventories Index registered 48.2 percent in April, the same reading as reported in March. Manufacturing inventories contracted at the same rate compared to the previous month.

ISM’s Backlog of Orders Index registered 45.4 percent, down 0.9 percentage point from the 46.3 percent reported in March, indicating order backlogs contracted for the 19th consecutive month after a 27-month period of expansion.

The nine manufacturing industries reporting growth in April — in order — are: Nonmetallic Mineral Products; Printing & Related Support Activities; Primary Metals; Textile Mills; Electrical Equipment, Appliances & Components; Petroleum & Coal Products; Transportation Equipment; Chemical Products; and Plastics & Rubber Products. The seven industries reporting contraction in April — in the following order — are: Miscellaneous Manufacturing; Machinery; Furniture & Related Products; Wood Products; Food, Beverage & Tobacco Products; Fabricated Metal Products; and Paper Products.