ISM Manufacturing PMI — April 2025
Headline: The Manufacturing PMI fell 0.3 point to 48.7, signaling contraction for a second consecutive month, with the rate of contraction faster than in March. The reading was below its trailing six-month average of 49.1, though within the 46.5–50.9 range. Manufacturing remained below its 50.0 breakeven, while the overall economy was still growing relative to its 42.3 breakeven.
Sub-indices:
| Index | Level | Prior | Change | Direction | vs 6-mo |
|---|---|---|---|---|---|
| New Orders | 47.2 | 45.2 | +2.0 | Contracting | below avg (49.8) |
| Production | 44.0 | 48.3 | -4.3 | Contracting | 6-mo low |
| Employment | 46.5 | 44.7 | +1.8 | Contracting | below avg (46.7) |
| Supplier Deliveries | 55.2 | 53.5 | +1.7 | Slowing | 6-mo high |
| Inventories | 50.8 | 53.4 | -2.6 | Growing | above avg (48.1) |
| Customers' Inventories | 46.2 | 46.8 | -0.6 | Too Low | below avg (46.8) |
| Prices | 69.8 | 69.4 | +0.4 | Increasing | 6-mo high |
| Backlog of Orders | 43.7 | 44.5 | -0.8 | Contracting | below avg (44.4) |
| New Export Orders | 43.1 | 49.6 | -6.5 | Contracting | 6-mo low |
| Imports | 47.1 | 50.1 | -3.0 | Contracting | 6-mo low |
Key moves:
- Production fell 4.3 points to 44.0, a six-month low and the sharpest deterioration among the major activity gauges.
- New Export Orders dropped 6.5 points to 43.1, also a six-month low; Imports fell below 50 from 50.1, marking a six-month low.
- Supplier Deliveries and Prices both reached six-month highs, at 55.2 and 69.8, respectively, indicating intensifying delivery delays and input-cost pressure.
Insights:
- New Orders improved by 2.0 points but remained in contraction at 47.2, illustrating a change-versus-direction divergence. Employment showed the same pattern: it rose 1.8 points but remained below 50 at 46.5, signaling continued net manufacturing job shedding.
- The output outlook weakened materially. Production at 44.0, Backlog at 43.7, and New Orders below 50 point to limited forward demand; the persistently contracting backlog is a negative signal for near-term production.
- Inventories remained just above expansion at 50.8, but the combination of falling inventories, weak orders and a contracting backlog does not suggest deliberate stocking for strong demand. The inventory position remains a cautionary feature rather than clear evidence of a voluntary build.
- Customers’ Inventories remained “Too Low” at 46.2 for a seventh month. As an inverse indicator, this is a potential demand support: depleted customer stocks may require replenishment even as current orders remain weak.
- Supplier Deliveries at 55.2 indicate slower deliveries and may reflect supply constraints, stronger demand in pockets, or both. With Prices at a six-month high of 69.8 and reported shortages in electronic components, plastic resin and semiconductors, input-cost and margin pressure remain significant.
Breadth & prices: Eleven industries reported growth and none were listed as contracting. Input prices continued to increase, with the Prices Index rising to 69.8, its highest level in the six-month history provided.
Takeaway: April’s report points to a manufacturing cycle that remains in contraction, with production, backlogs and external demand deteriorating despite modest improvement in orders and employment. The combination of weak activity and six-month-high delivery and price pressures raises a stagflationary risk for goods-producing sectors, while low customer inventories provide some potential