Manufacturing activity in the United States showed signs of growth in April for the first time in six months, according to the latest data released by S&P Global on Monday; however, the increase resulted in higher price pressures.
The S&P Global Manufacturing Purchasing Managers’ Index rose to 50.2 in April from 49.2 in March, and the outcome was in line with the preliminary reading of 50.4.
For the first time in over six months, the indicator rose beyond the 50.0 threshold separating expansion from contraction. It was also the highest print since October.
S&P Global reported that the manufacturing sector saw an uptick in demand due to an increase in new orders, with the gain being primarily domestic.
According to Chris Williamson, chief business economist at S&P Global Market Intelligence, “US manufacturing output has regained some encouraging momentum at the start of the second quarter, having stabilized in March after four months of decline.”
“While the upturn is in part linked to greatly improved supply chains, helping reduce backlogs of orders. April also saw a welcome upturn in new order inflows for the first time since last September. Although only modest, the rise in new orders hints at a tentative revival of demand, notably from consumers but there are also signs that fewer customers are deliberately winding down their inventory levels.
“The brightening demand picture was accompanied by a lifting of business confidence about the outlook and increased hiring. The downside was a reigniting of inflationary pressures, with a stronger order book encouraging more firms to pass through higher costs to customers,” Williamson said.
Separately on Monday, the Institute for Supply Management found that manufacturing activity in the U.S. remained contracting in April.
In April, the ISM manufacturing PMI rose to 47.1% from March’s 46.3%. The number was higher than the 46.6% forecast by traders.
