U.S. manufacturing growth remained subdued in April as confidence in the outlook hit a ten-month low and prices continued to quickly rise. With that said, the S&P Global U.S. Manufacturing PMI remained in expansion territory for a fourth straight month in April at 50.2 signaling a marginal expansion. The latest reading was lower than the 50.7 forecast.
Here is an excerpt from Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, in the latest press release:
"Manufacturing continued to flat-line in April amid worrying downside risks to the outlook and sharply rising costs.
"Factory output fell for a second successive month as tariffs were widely blamed on a slump in export orders and curbed spending among customers more broadly amid rising uncertainty.
"Although the survey saw some producers report evidence of beneficial tariff-related switching of customer demand away from imports, any such sales increase was countered by worries over tariff-related disruptions to supply chains and lost export sales. This served to drive business confidence about prospects in the year ahead down sharply to the gloomiest for 10 months.
"Concerns have also spiked in terms of input costs, especially for imported materials and components, due to the triple whammy of tariff-related price hikes, supply shortages, and the weaker dollar.
"Manufacturers are responding to these changing demand, supply and cost conditions by raising their selling prices and trimming headcounts to help protect their margins."
Background on the S&P Global US Manufacturing PMI
The S&P Global US Manufacturing PMI™ measures the activity level of purchasing mangers in the manufacturing sector through a questionnaire of ~600 manufacturers. The reported headline number is a weighted average of New Orders (30%), Output (25%), Employment (20%), Suppliers' Delivery Time (15%), and Stocks of Purchases (10%). The S&P Manufacturing PMI is a diffusion index, meaning that a reading above 50 indicates expansion in the sector compared to the previous month and a reading below 50 indicates contraction.
