US manufacturing activity grew in April for a fourth consecutive month, as order growth outpaced production and the Mideast Gulf war boosted prices.
The Institute for Supply Management's (ISM) purchasing managers index (PMI) came in at 52.7 in April, unchanged from March and growing for a fourth month following 10 months of contraction.
The new orders index rose to 54.1 in April from 53.5 in March, while the production index eased to 53.4 in April from 55.1 the prior month, reflecting slowing growth. Readings above 50 signal growth while readings below that level signal contraction.
The prices index surged to 84.6 in April, the highest reading since April 2022, from 78.3 the prior month and is up 25.6 percentage points in the last three months. The gains were driven by increases in steel and aluminum prices, tariffs, and "now increases in petroleum-based products as a result of Middle East conflict," ISM said.
The new export orders index fell to 47.9 in April from 49.9 the prior month, showing deepening contraction. The imports index eased to 50.3 in April from 52.6, showing slowing growth.
"Demand for manufactured goods is trending higher versus last year; however geopolitical uncertainty and rising oil and diesel prices continue to weigh on demand," a transportation equipment manufacturer wrote in a response to the ISM's monthly survey of purchasing managers and supply executives from 18 manufacturing industries.
A machinery executive cited "general uncertainty" over the impact of the war but awareness that the impacts of fuel increases "are coming." Others cited the effects of "US tariffs."
The employment index fell to 46.4 in April, showing deepening contraction, from 48.7 the prior month.
"In this second month of the Iran war ..., 31 percent of the comments were positive and 69 percent negative," ISM said. "Among comments, the war was mentioned in 47 percent and tariffs in 18 percent."
The supplier delivery index rose to 60.6 in April from 58.9, showing slower deliveries for a fifth month, while the inventory index rose to 49, showing slowing contraction, from 47.1 the prior month.
