Economy: ISM Manufacturing Index for April 2018

Earlier today, the Institute for Supply Management® (ISM®) released their Manufacturing Purchasing Manager's Index (PMI®) for April 2018:

Predicted: 58.6%
Actual: 57.3%

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Previous month: 59.3%

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Every month, the ISM surveys purchasing and supply executives at hundreds of companies across the country who are involved in manufacturing in some form. The resulting index is watched closely by academics, economists and investors because manufacturing accounts for about 12% of U.S. Gross Domestic Product (GDP).

The PMI is a reliable barometer of U.S. manufacturing: A PMI above 50% implies that U.S. manufacturing expanded during the month specified, while a reading below 50% implies that the made-in-the-USA sector contracted.

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From Today's Report:

"... Economic activity in the manufacturing sector expanded in April, and the overall economy grew for the 108th consecutive month, say the nation’s supply executives in the latest Manufacturing ISM® Report On Business®..."

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The following is a sampling of quotes from a diverse pool of U.S. manufacturers:

"We are seeing strong sales in the U.S., Europe and Asia.”
(Chemical Products)

“Business is off the charts. This is causing many collateral issues: a tightening supply chain market and longer lead times. Subcontractors are trading capacity up, leading to a bidding war for the marginal capacity. Labor remains tight and getting tighter.”
(Transportation Equipment)

“Shortages of trucks and drivers has impacted delivery times.”
(Food, Beverage and Tobacco Products)

“The recent steel tariffs have made it difficult to source material, and we have had to eliminate two products due to availability and cost of raw material.”
(Fabricated Metal Products)

“Demand is up for products. Commodity pricing for steel and other materials increased due to the proposed tariffs. We are seeing commodity futures coming down. A lot of suppliers are asking for increases, and the team is battling those requests.”
(Machinery)

"[The] 232 and 301 tariffs are very concerning. Business planning is at a standstill until they are resolved. Significant amount of manpower [on planning and the like] being expended on these issues.”
(Miscellaneous Manufacturing)

“Production orders at this time are still strong and being driven partially by construction factors and customers purchasing ahead to avoid potential price increases.”
(Plastics and Rubber Products)

“The general outlook for 2018 remains positive and upbeat as we see continued signs of a growing economy and investment in housing and infrastructure.”
(Nonmetallic Mineral Products)