Growth Continues Gradual Slowdown
May 9, 2005,
The U.S. manufacturing sector continued to grow during April, but at a steadily slowing pace, with the rate of growth decelerating during each of the past six months, the nation's purchasing managers reported.
In April, the manufacturing sector grew for a 23rd consecutive month, “the longest period of growth in the last 16 years,” said Norbert Ore, chairman of the ISM's Manufacturing Business Survey Committee. “However, the rate of growth slowed to its lowest level since July 2003. The trend is definitely toward a slower pace of growth, and that should relieve some of the pricing pressure that the sector has experienced during 2004 and year-to-date in 2005. Declines in inventories indicate that manufacturers are adjusting to slower growth in new orders.”
New orders fell 2.4 percentage points during the month, and order backlogs slipped 3 percentage points. Production was relatively flat, edging up just 0.2 percentage points.
In good news for suppliers hard hit by rising prices of raw materials and supplies, the Prices Index declined 2 percentage points, reversing a recent run-up.
Month-over-month percentage-point change
|Source: Institute for Supply Management
|Purchasing Managers' Index||-1.9%|
|Prices Manufacturers Pay||-2.0|