April 2013 Manufacturing ISM at a Glance; What do the Numbers Mean?

US Manufacturing as measured by the April 2013 Manufacturing ISM Report On Business® is treading water barely above contraction.

Economic activity in the manufacturing sector expanded in April for the fifth consecutive month, and the overall economy grew for the 47th consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business®.

ISM at a Glance

Series Data	Apr Index	Mar Index	Percentage Point Change	Direction	Rate of Change	Trend (Months)
PMI™	50.7	51.3	-0.6	Growing	Slowing	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

Synopsis

Manufacturing employment has grown for 43 months. I expect that trend to break next month.

Production was up but inventories were way lower. The drop in inventories, in conjunction with a big slowdown in employment, is likely a leading indicator of future production.

The positive surprise that does not fit into the above assessment is that new orders grew at a faster rate. Next month may be telling. I expect the new order divergence to resolve to the downside as the global economy and the US economy are both slowing.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com