Submitted by Mark Hanna
Courtesy of MarketMontage. View original post here.
While this is a slight miss the bigger picture here is 50 is the dividing line between expansion and contraction. Yesterday we had Chicago PMI that was contractionary – the worst reading since late 2009 in fact. Today we have an expansionary U.S. ISM but just. New orders are the only decent bright spot in a relative sense – employment stunk and prices are ‘deflating’ (good for the Fed I guess) The market is up 7 out of 8 sessions so this could be a good excuse for some consolidation but the economic data has really slowed the past 6 weeks.
“The PMI™ registered 50.7 percent, a decrease of 0.6 percentage point from March’s reading of 51.3 percent, indicating expansion in manufacturing for the fifth consecutive month, but at the lowest rate of the year. The New Orders Index increased in April by 0.9 percentage point to 52.3 percent, and the Production Index increased by 1.3 percentage points to 53.5 percent. The Employment Index registered 50.2 percent, a decrease of 4 percentage points compared to March’s reading of 54.2 percent. The Prices Index registered 50 percent, decreasing 4.5 percentage points from March, indicating that overall raw materials prices remained unchanged from last month. Comments from the panel indicate a range of strong/steady growth, to flat/declining volumes, depending upon the particular industry.”
WHAT RESPONDENTS ARE SAYING …
- “Business can be described as flat at best.” (Food, Beverage & Tobacco Products)
- “Production is still strong; several new projects to support alternative energy.” (Primary Metals)
- “Slight uptick in business, but overall continuing slowdown in defense due to budget/sequester.” (Computer & Electronic Products)
- “We have concerns about safety of doing business in South Korea. Our largest customer and part owner is in South Korea.” (Electrical Equipment, Appliances & Components)
- “Automotive demand remains firm.” (Fabricated Metal Products)
- “Business continues at a steady pace.” (Machinery)
- “General business conditions and industrial markets remain strong.” (Transportation Equipment)
- “Seasonal pick-up underway in the office furniture industry.” (Furniture & Related Products)
- “Market has slowed this month — weather in some parts of the country, also customers built inventory in anticipation of building increase, but the economy is still slow to pick up this spring.” (Wood Products)
- “Overall, volume is steady or slightly declining. Q1 sales volume is lower than projected.” (Chemical Products)
| MANUFACTURING AT A GLANCE APRIL 2013 |
||||||
|---|---|---|---|---|---|---|
|
Index |
Series Index Apr |
Series Index Mar |
Percentage Point Change |
Direction |
Rate of Change |
Trend* (Months) |
| PMI™ | 50.7 | 51.3 | -0.6 | Growing | Slower | 5 |
| New Orders | 52.3 | 51.4 | +0.9 | Growing | Faster | 4 |
| Production | 53.5 | 52.2 | +1.3 | Growing | Faster | 8 |
| Employment | 50.2 | 54.2 | -4.0 | Growing | Slower | 43 |
| Supplier Deliveries | 50.9 | 49.4 | +1.5 | Slowing | From Faster | 1 |
| Inventories | 46.5 | 49.5 | -3.0 | Contracting | Faster | 2 |
| Customers’ Inventories | 44.5 | 47.5 | -3.0 | Too Low | Faster | 17 |
| Prices | 50.0 | 54.5 | -4.5 | Unchanged | From Increasing | 1 |
| Backlog of Orders | 53.0 | 51.0 | +2.0 | Growing | Faster | 3 |
| Exports | 54.0 | 56.0 | -2.0 | Growing | Slower | 5 |
| Imports | 55.0 | 54.0 | +1.0 | Growing | Faster | 3 |
| OVERALL ECONOMY | Growing | Slower | 47 | |||
| Manufacturing Sector | Growing | Slower | 5 | |||
*Number of months moving in current direction.
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