Manufacturing Survey Suggests Strong Demand, Materials Shortages, and Rising Prices

by Robert Hughes
The American Institute for Economic Research

The Institute for Supply Management’s Manufacturing Purchasing Managers’ Index eased back to 60.7 in April, a decline of 4.0 points over the 64.7 percent result in March. April is the eleventh consecutive reading above the neutral 50 threshold (see top of first chart). Over the past 11 months, the Purchasing Managers’ index has averaged 58.1, the highest since January 2019. The survey results suggest that the manufacturing-sector recovery continues to gain momentum.

Among the key components of the Institute for Supply Management’s most recent survey, the New Orders Index came in at 64.3 percent, down 3.7 percentage points from 68.0 percent in March (see top of first chart). The New Orders Index has been above 50 for 11 consecutive months and above 60 for 10 consecutive months. The 10-month average is 64.6, the highest since September 2004. The new export orders index, a separate measure from new orders, rose to 54.9 versus 54.5 in March. The new export orders index has been above 50 for 10 consecutive months.

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