ISM Manufacturing Still Strong at 60.4, Pricing Pressures Continue

ISM Manufacturing continues to show healthy expansion, although down a bit from previous months.  (Any reading over 50 is expansionary) Some of that slowdown might be blamed on the situation in Japan.  Consensus for this month was a slowdown to 59.5, so the 60.4 was "better than expected".  Pricing pressure continues in the supply chain. While manufacturing is only about 11% of U.S. output, and 9% of employment, this has been an area of strength during the past few years.

Original source:

WHAT RESPONDENTS ARE SAYING ...

• "Rapidly rising raw material costs putting extreme pressure on profits." (Food, Beverage & Tobacco Products)
• "Plastic resin product prices are climbing so fast that [suppliers] are attempting to increase prices on orders already accepted but not [yet] delivered." (Chemical Products)
• "Customers are rebuilding safety stock levels of inventory, and also trying to buy ahead of material price increases." (Plastics & Rubber Products)
• "Market continues to get stronger month over month. Recovery is faster than anticipated." (Transportation Equipment)
• "Pressure from offshore suppliers continues to mount with exchange rate increases and seasonal demand for capacity." (Miscellaneous Manufacturing)

MANUFACTURING AT A GLANCE APRIL 2011
Index	Series Index April	Series Index March	Percentage Point Change	Direction	Rate of Change	Trend* (Months)
PMI	60.4	61.2	-0.8	Growing	Slower	21
New Orders	61.7	63.3	-1.6	Growing	Slower	22
Production	63.8	69.0	-5.2	Growing	Slower	23
Employment	62.7	63.0	-0.3	Growing	Slower	19
Supplier Deliveries	60.2	63.1	-2.9	Slowing	Slower	23
Inventories	53.6	47.4	+6.2	Growing	From Contracting	1
Customers' Inventories	40.5	39.5	+1.0	Too Low	Slower	25
Prices	85.5	85.0	+0.5	Increasing	Faster	22
Backlog of Orders	61.0	52.5	+8.5	Growing	Faster	4
Exports	62.0	56.0	+6.0	Growing	Faster	22
Imports	55.5	56.5	-1.0	Growing	Slower	20
OVERALL ECONOMY				Growing	Slower	23
Manufacturing Sector				Growing	Slower	21

*Number of months moving in current direction.