Manufacturing activity continues to contract

ISM manufacturing index stays at low level from March to April

By Maria Varmazis -- Purchasing, 5/1/2008 8:57:00 AM

The Institute for Supply Management's (ISM) monthly index on national manufacturing activity today reported there was no change in growth between March and April, with the index remaining at a value of 48.6. This means manufacturing activity continued a slow contraction last month, as any value on the index below 50 points indicates negative growth.

ISM said in a statement that "Manufacturers are in a situation where both new orders and production are slowly declining, but prices continue to rise at highly inflationary rates.''

“Although it is encouraging that the index didn't decline further, it has remained below the neutral threshold of 50 for three consecutive months, which suggests that manufacturing has few tailwinds early in the second quarter,” says Ryan Sweet of Moody’s Dismal Scientist.

According to the ISM report, the only commodity that went down in price for the April report was methanol, whereas steel and caustic soda are both in short supply.

See also: Buyers say manufacturing economy is barely growing

See also: Prices are strong although business indicators are soft