US Manufacturing as measured by the April 2013 Manufacturing ISM Report On Business® is treading water barely above contraction.

Economic activity in the manufacturing sector expanded in April for the fifth consecutive month, and the overall economy grew for the 47th consecutive month, say the nation’s supply executives in the latest Manufacturing ISM Report On Business®.

ISM at a Glance

Series Data Apr Index Mar Index Percentage Point Change Direction Rate of Change Trend (Months)
PMI™ 50.7 51.3 -0.6 Growing Slowing 5
New Orders 52.3 51.4 +0.9 Growing Faster 4
Production 53.5 52.2 +1.3 Growing Faster 8
Employment 50.2 54.2 -4.0 Growing Slower 43
Supplier Deliveries 50.9 49.4 +1.5 Slowing From Faster 1
Inventories 46.5 49.5 -3.0 Contracting Faster 2
Customers’ Inventories 44.5 47.5 -3.0 Too Low Faster 17
Prices 50.0 54.5 -4.5 Unchanged From Increasing 1
Backlog of Orders 53.0 51.0 +2.0 Growing Faster 3
Exports 54.0 56.0 -2.0 Growing Slower 5
Imports 55.0 54.0 +1.0 Growing Faster 3


Manufacturing employment has grown for 43 months. I expect that trend to break next month.

Production was up but inventories were way lower. The drop in inventories, in conjunction with a big slowdown in employment, is likely a leading indicator of future production.

The positive surprise that does not fit into the above assessment is that new orders grew at a faster rate. Next month may be telling. I expect the new order divergence to resolve to the downside as the global economy and the US economy are both slowing.

Mike “Mish” Shedlock