US Economy
Two US manufacturing PMI surveys show strong growth in April
By Michael Hennigan, Finfacts founder and editor
May 1, 2014 - 4:55 PM

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Two US manufacturing PMI (purchasing managers' index data) surveys published Thursday show strong growth in April.

On Wednesday a government report showed that US growth shuddered to a halt in the first quarter due to both severe weather and a fall in exports.

Activity in the manufacturing sector expanded in April for the 11th consecutive month, and the overall economy grew for the 59th consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business.

Bradley J. Holcomb, chair of the Institute for Supply Management (ISM) Manufacturing Business Survey Committee, said:. "The April PMI registered 54.9%, an increase of 1.2 percentage points from March's reading of 53.7% indicating expansion in manufacturing for the 11th consecutive month. The New Orders Index registered 55.1%, equal to the reading in March, indicating growth in new orders for the 11th consecutive month. The Production Index registered 55.7%, slightly below the March reading of 55.9 percent. Employment grew for the 10th consecutive month, registering 54.7%, an increase of 3.6 percentage points over March's reading of 51.1%. Comments from the panel generally remain positive; however, some expressed concern about international economic and political issues potentially impacting demand."

Of the 18 manufacturing industries, 17 are reporting growth in April in the following order: Apparel, Leather & Allied Products; Primary Metals; Furniture & Related Products; Miscellaneous Manufacturing; Food, Beverage & Tobacco Products; Transportation Equipment; Fabricated Metal Products; Machinery; Printing & Related Support Activities; Plastics & Rubber Products; Textile Mills; Chemical Products; Computer & Electronic Products; Wood Products; Paper Products; Petroleum & Coal Products; and Electrical Equipment, Appliances & Components. The only industry reporting contraction in April is Nonmetallic Mineral Products.

Markit, the London-based financial data firm, said US manufacturers indicated a strong start to the second quarter of 2014, with output and new business volumes both rising sharply during April. Job creation continued, albeit at the slowest pace for three months, while input cost inflation moderated to its weakest since May 2013. Factory gate price inflation was the least marked for nine months.

The headline figure derived from the survey is the Markit US Manufacturing Purchasing Managers’ Index (PMI), which is designed to signal changes in prevailing business conditions in the US manufacturing sector. PMI readings above 50.0 signal an improvement in business conditions, while readings below 50.0 signal deterioration.

At 55.4 in April, the final Markit US Manufacturing PMI was little-changed from 55.5 in March and remained well above the 50.0 no-change value. The latest reading signalled an improvement in overall business conditions that matched the average for the first quarter of 2014 (55.4).

Faster expansions of production levels and incoming new work were the main positive influences on the headline PMI in April. Latest data signalled that output increased at the steepest pace since March 2011. Survey respondents commented that improving domestic economic conditions had been a key factor supporting production levels in April.

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