Manufacturing Stretches Gain
May 7, 2007,
The manufacturing sector grew at a faster rate in April, in an ongoing recovery from the fourth-quarter 2006 drop — although caution is due, in light of raw material price increases, the nation's purchasing managers reported.
April saw the growth rate accelerate, and the PMI reach 54.7%, a reading that is the highest since an identical level was reported for May 2006. "New Orders and Production improved significantly, as did Employment," said Norbert Ore, chairman of the ISM's Manufacturing Business Survey Committee.
Ore added, "Manufacturers are now in their ninth month of inventory reduction, so supply chains are generally in balance."
"On the negative side," he said, "prices continue to rise at a rapid rate with metals and energy being the areas of greatest concern to buyers."
Indeed, the Prices index rose by 7.5 percentage points in April — the fourth straight monthly hike — and with a downward trend in both Inventories (down 1.2 points) and Customers' Inventories (down 1.0 points), the indication is that it could cost more to keep up with the growing Backlog of Orders (swinging up 7.5 points after a recent downturn).
Manufacturing benchmarksMonth-over-month percentage change
|Source: Institute for Supply Management
|Purchasing Managers' Index||3.8|
|Prices Manufacturers Pay||7.5|