Markit manufacturing PMI for April (F)

PMI manufacturing 60.5 highest level on record
  • Preliminary report
  • manufacturing PMI index 60.5 versus 59.1 in March. A year ago it was 36.1 at the start of the pandemic
  • the reading this month is the highest on record (May 2007)
  • index prices 77.2 versus 74.8
  • new orders highest level since April 2010. The upturn was due to stronger client demand
  • new export orders expended at the second quickest rate on record
  • backlogs of the work arose at the second steepest rate yet recorded by the survey
  • employment increased strongly and at the second fastest pace since December 2017
  • input costs rose rapidly in April with the rate of inflation quickening to the sharpest since July 2018. The rise was attributed to material shortages and greater transportation costs
  • firms passed on higher costs through further rises in output charges. The rate of charge inflation eased slightly from March but was the second fastest pace on record
  • business confidence moderated in April with optimism slipping two three-month lows. Expectations were weighed down by concerns regarding supply chain disruptions
  • click here for the full report

The chief business economist Chris Williamson commented:

"US manufacturers reported the biggest boom in at least 14 years during April. Demand surged at a pace not seen for 11 years amid growing recovery hopes and fresh stimulus measures.

He added:

"Supply chain delays worsened, however, running at the highest yet recorded by the survey, choking production at many companies. Worst affected were consumer-facing firms, where a lack of inputs has caused production to fall below order book growth to a record extent in over the past two months as household spending leapt higher.

"Suppliers have been able to command higher prices due to the strength of demand for inputs, pushing material costs higher at a rate not seen since 2008.

"Attempts to expand capacity via hiring extra staff gained further momentum, though in some cases staff shortages were an additional constraint on production. However, with confidence in the outlook continuing to run at one of the highest levels seen over the past seven years, buoyed by vaccine roll-outs and stimulus, further investment in production capacity should be seen in coming months, helping alleviate some of the price pressures."

There is good and bad in the report. The supply chain issues, shortage of workers are concerns for potential growth and also inflation.

The ISM manufacturing PMI data for April will be released at the top of the hour with expectations of 65.0 versus 64.7 in March.