NAM Chief Economist comments on ISM Manufacturing Report.
Press Release Summary:
According to ISM Manufacturing Report, PMI index rose to 60.5 in April, the highest level since June 2004. Improvement was broad-based across all manufacturing industries with increases in production, new orders, and employment. Export component of report remained at near 2-decade high last month, underscoring how exports continue to lead economic recovery. However, while most manufacturing sectors have moved into recovery, industries connected to housing have continued to struggle.
Original Press Release:
NAM Chief Economist on ISM Manufacturing Report
National Association of Manufacturers (NAM) Chief Economist David Huether commented on today's ISM Manufacturing Report on www.shopfloor.org. See his blogpost below.
ISM Manufacturing Report Shows Continued Positive Momentum
The Institute for Supply Management (ISM)'s Manufacturing PMI index rose to 60.5 in April - the highest level since June 2004 - showing that the manufacturing recovery gained momentum in April. (ISM release.) The improvement was broad-based across all manufacturing industries with increases in production, new orders and employment. The export component of today's report remained at a near two-decade high last month, underscoring how exports continue to lead the economic recovery. This is good news for manufacturing workers given that more than a quarter of manufacturing employment is supported by exports.
Given significant upturns in several regional manufacturing surveys reported last week, today's report was not a revelation. However, the fact that no industry reported a contraction last month was a welcome surprise. While most manufacturing sectors, lead by exporters, have moved into recovery over the past several quarters, a number of industries - especially those connected to housing - have continued to struggle. The homebuyer tax credit expired last month, and the credit's approaching deadline likely spurred construction-related industrial activity in April. Thus, a short-term correction in some manufacturing activity in the next couple of months would not be a surprise in the wake of the end of the housing tax credit.
While manufacturers are leading the economic expansion, the challenge will be to sustain those advances and build a recovery capable of driving down the jobless rate.
