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Manufacturing Activity Continues to Improve

Manufacturing activity improved for the third straight month, although the sector is still contracting, according to a closely watched index. The Institute for Supply Management said its manufacturing activity index increased to a reading of 40.1 in April from 36.3 in March. A reading below 50 indicates manufacturing activity is shrinking, while a reading above 50 indicates expansion. The index has slowly climbed since hitting an all time low of 32.9 in December. Norbert J. Ore, chair of the Institute for Supply Management Manufacturing Business Survey Committee, said "The decline in the manufacturing sector continues to moderate. While this is a big step forward, there is still a large gap that must be closed before manufacturing begins to grow once again.” He said April’s index was driven by a rebound in new orders. He added, “The Customers' Inventories Index indicates that channels are paring inventories to acceptable levels after reporting inventories as 'too high' for eight consecutive months. The prices manufacturers pay for their goods and services continue to decline; however, copper prices have bottomed and are now starting to rise. This is definitely a good start for the second quarter."

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Date Last Updated: 05/07/2009