Flash Manufacturing PMI Hits a Four-Year High as Domestic Demand Strenghtens
The S&P Global Flash U.S. Manufacturing PMI increased from 52.3 to 54.0 in April, a 47-month high. This continues the trend of nine consecutive months of growth. Factory production and new order growth improved in April, with both experiencing their strongest expansion since 2022. Meanwhile, export orders declined after stagnating the prior month as a result of uncertainty caused by the conflict in the Middle East.
Inventories grew marginally in April as companies continued to purchase safety stock amid delivery concerns. At the same time, supplier delivery time lengthened to the greatest extent since August 2022, with respondents attributing the increase to the conflict in the Middle East. Manufacturers’ input cost inflation rose to a ten-month high and at the second fastest rate since July 2022. Meanwhile, selling price inflation also moved up, resulting in the largest jump in average selling prices since July 2022. Overall, price increases accelerated for manufacturers and the service industry.
Overall business activity rose to a three-month high, stepping up from 50.3 in March to 52.0 in April. While manufacturing growth accelerated, the services sector rose only slightly, moving to a two-month high. Overall, growth of new orders accelerated, driven by domestic demand as export orders fell at an increased rate. Employment grew marginally as manufacturing headcounts fell for the first time in nine months.
Furthermore, optimism about future business conditions improved in April, with manufacturers’ optimism rising to the highest level in over a year. The optimism reflected manufacturers’ upturn in orders, additional investment in marketing and hopes of reshoring. In addition, the outlook for service providers remained low as war-related concerns further exacerbated cost-of-living concerns.