Manufacturing Expanded in April

The U.S. manufacturing sector expanded in April for the fourth straight month following a 10-month period of contraction, registering 52.7 percent, the same reading as March, according to the Institute for Supply Management.

Of the five subindexes that directly factor into the Manufacturing PMI^®, three (New Orders, Production and Supplier Deliveries) were in expansion territory, the same as in March. The Employment and Inventories indexes stayed in contraction, with Employment in decline compared to March.

Of the six largest manufacturing industries, four (Transportation Equipment; Machinery; Computer & Electronic Products; and Chemical Products) expanded in April. A reading above 50% indicates% the manufacturing sector is generally expanding; below 50% indicates that it is generally contracting.

A Manufacturing PMI above 47.5%, over a period of time, generally indicates an expansion of the overall economy. Therefore, the April Manufacturing PMI of 52.7% indicates the overall economy grew for the 18th straight month.

"The past relationship between the Manufacturing PMI^® and the overall economy indicates that the April reading (52.7 percent) corresponds to a 1.8-percent increase in real gross domestic product (GDP) on an annualized basis," says Susan Spence, Chair of the Institute for Supply Management^® (ISM^®) Manufacturing Business Survey Committee.