ISM Manufacturing Index (PMI) Declined Less than Expected in April

The Institute for Supply Management (ISM) Manufacturing Index (PMI) came in at 41.5% in April, down from 49.1% but beating the consensus forecast. Forecasts for the PMI ranged from a low of 30.0 to a high of 43.0, and the consensus forecast was 37.5.

“Comments from the panel were strongly negative (three negative comments for every one positive comment) regarding the near-term outlook, with sentiment clearly impacted by the coronavirus (COVID-19) pandemic and continuing energy market recession,” said Timothy R. Fiore, Chair of the ISM Manufacturing Business Survey Committee.

“The PMI indicates a level of manufacturing-sector contraction not seen since April 2009, with a strongly negative trajectory.”

WHAT RESPONDENTS ARE SAYING

• “Thirty-percent decrease for April due to COVID-19 impact on both customers and suppliers.” (Computer & Electronic Products)
• “Production stopped, other than to make hand sanitizer for those in need.” (Chemical Products)
• “COVID-19 has created a wave of activities, including vendors closing, vendors focusing only on the medical industry, employees not coming to work, delayed shipments from overseas, [and] etcetera.” (Transportation Equipment)
• “The food processing B2B space remains steady. We are weathering the storm. There is a fortunate increased need for packaged foods. Softening is showing through in some products that find their way into food service and lodging.” (Food, Beverage & Tobacco Products)
• “Our refinery is losing money making gasoline due to the falling demand.” (Petroleum & Coal Products)
• “We supply the construction industry in various ways, where the slowdown has been a bit slower than most industries. It is, however; beginning to impact our business, and we see more challenges on the horizon.” (Fabricated Metal Products)
• “The company I work for manufactures personal protective equipment [PPE], specifically N95 masks, face shields, as well as selling protective clothing and hand protection. In the area of PPE, our backlog has spiked to numbers we have never seen. While no doubt some of the backorders will be canceled, many of the orders are longer term commitments from [the] U.S. government.” (Apparel, Leather & Allied Products)
• “Our packaging business is starting to see signs of a slowdown in May after two strong months into COVID-19.” (Paper Products)
• “COVID-19 has destroyed our market and our company. Without a full recovery very soon, and some assistance, I fear for our ability to continue operations.” (Nonmetallic Mineral Products)
• “Dealing with the effects of coronavirus and having 65 percent of our operations down.” (Furniture & Related Products)