US FACTORY activity contracted in April on declining demand while input prices rose at the fastest pace since inflation peaked in 2022.
The Institute for Supply Management’s manufacturing gauge fell 1.1 points to 49.2, after expanding a month earlier for the first time since 2022, data out on Wednesday (May 1) showed. Readings less than 50 indicate contraction and the April figure was weaker than the median estimate in a Bloomberg survey of economists.
A measure of costs for materials and other inputs rose for the second straight month, suggesting stubborn inflationary pressures. The group’s gauge of prices paid increased by 5.1 points to 60.9, the highest since June 2022.
At the same time, a gauge of production fell 3.3 points in April after a large gain a month earlier, while a measure of new orders slipped back into contraction territory.
The readings indicate US manufacturing is struggling for traction after some optimistic signs earlier this year for the industry’s outlook. Producers continue to battle headwinds of higher interest rates, elevated input costs and sluggish overseas markets.
Orders from overseas customers shrank for the first time in three months, while order backlogs contracted at a faster rate, according to the ISM.
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The data also showed the measure of customer inventories shrank at a slower pace and factory stockpiles were unchanged from March.
The ISM index of employment contracted for a seventh month, though at a slower pace. BLOOMBERG
