US manufacturing grew in April, but pace slowed for 2nd month

01 May 2013 17:06  [Source: ICIS news]

WASHINGTON (ICIS)--US manufacturing industries continued to expand in April, a respected survey reported on Wednesday, but the pace of growth has slowed for a second consecutive month and the broad industry is again getting close to contraction.

In its monthly purchasing managers index (PMI), the Institute for Supply Management (ISM) said that the key measure of manufacturing declined to 50.7% in April from the March reading of 51.3%.

March had seen a decline from February’s 54.2% level, which was the highest PMI mark since January 2011.

April’s 50.7% result also is the lowest point this year.

The PMI is a composite of supplier responses to the ISM’s monthly survey of 10 different business performance measures in 18 major manufacturing sectors.

A PMI reading above 50% indicates the US manufacturing sector is expanding, while an index measure below 50% means production is contracting.

In November last year, the index slipped just under that critical midpoint, falling to 49.9%.

But since then, the PMI had been climbing, from 50.2% in December, to 53.1% in January and up to 54.2% in February before easing down to 51.3% in March and now dipping to 50.7% in April.

Bradley Holcomb, chairman of the ISM survey committee, noted that while the subsidiary new orders index showed a small gain last month and the production index edged up as well, other key measures did not fare well and pulled the overall PMI lower.

He said the employment index fell by four points and the pricing index declined by 4.5 percentage points.

Among the 18 manufacturing industries tracked by ISM, 14 reported growth in April, including plastics and rubber products. But the chemical products segment was one of three industries to report contraction during the month. One sector was flat for the month.

An unidentified chemicals industry executive was quoted as saying: “Overall, volume is steady or slightly declining; first quarter sales volume is lower than projected.”

Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy

By: Joe Kamalick
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