Manufacturing PMI® at 55.4%; April 2022 Manufacturing ISM® Report On Business®

New Orders, Production and Employment Growing at Slower Rates; Supplier Deliveries Slowing at a Faster Rate; Backlog Growing Slower; Raw Materials Inventories Growing at a Slower Rate; Customers' Inventories Too Low; Prices Increasing Slower; Exports and Imports Growing at Slower Rates; Record-Long Lead Times for CapEx and Production Materials

TEMPE, Ariz., May 2, 2022 /PRNewswire/ -- Economic activity in the manufacturing sector grew in April, with the overall economy achieving a 23rd consecutive month of growth, say the nation's supply executives in the latest Manufacturing ISM^® Report On Business^®.

The report was issued today by Timothy R. Fiore, CPSM, C.P.M., Chair of the Institute for Supply Management^® (ISM^®) Manufacturing Business Survey Committee:

"The April Manufacturing PMI^® registered 55.4 percent, a decrease of 1.7 percentage points from the March reading of 57.1 percent. This figure indicates expansion in the overall economy for the 23rd month in a row after a contraction in April and May 2020. This is the lowest reading since July 2020 (53.9 percent). The New Orders Index registered 53.5 percent, down 0.3 percentage point compared to the March reading of 53.8 percent. The Production Index reading of 53.6 percent is a 0.9-percentage point decrease compared to March's figure of 54.5 percent. The Prices Index registered 84.6 percent, down 2.5 percentage points compared to the March figure of 87.1 percent. The Backlog of Orders Index registered 56 percent, 4 percentage points lower than the March reading of 60 percent. The Employment Index figure of 50.9 percent is 5.4 percentage points lower than the 56.3 percent recorded in March. The Supplier Deliveries Index registered 67.2 percent, an increase of 1.8 percentage points compared to the March figure of 65.4 percent. The Inventories Index registered 51.6 percent, 3.9 percentage points lower than the March reading of 55.5 percent. The New Export Orders Index reading of 52.7 percent is down 0.5 percentage point compared to March's figure of 53.2 percent. The Imports Index registered 51.4 percent, a 0.4-percentage point decrease from the March reading of 51.8 percent."

Fiore continues, "The U.S. manufacturing sector remains in a demand-driven, supply chain-constrained environment. In April, progress slowed in solving labor shortage problems at all tiers of the supply chain. Panelists reported higher rates of quits compared to previous months, with fewer panelists reporting improvement in meeting head-count targets. April saw a slight easing of prices expansion, but instability in global energy markets continues. Surcharge increase activity across all industry sectors continues. Panel sentiment remained strongly optimistic regarding demand, though the three positive growth comments for every cautious comment was down from March's ratio of 6-to-1, Panelists continue to note supply chain and pricing issues as their biggest concerns. Demand expanded, with the (1) New Orders Index remaining in growth territory, supported by weaker growth of new export orders, (2) Customers' Inventories Index remaining at a very low level and (3) Backlog of Orders Index continuing in respectable growth territory. Consumption (measured by the Production and Employment indexes) grew during the period, though at a slower rate, with a combined minus-6.3-percentage point change to the Manufacturing PMI^® calculation. The Employment Index expanded for the eighth straight month; panelists indicated limited improvement in ability to hire, but challenges with turnover (quits and retirements) and resulting backfilling continue to plague efforts to adequately staff organizations, to a greater extent compared to March. Inputs — expressed as supplier deliveries, inventories, and imports — continued to constrain production expansion. The Supplier Deliveries Index indicated deliveries slowed at a faster rate in April, while the Inventories and Imports indexes grew at slower rates. The Prices Index increased for the 23rd consecutive month, at a slower rate compared to March.

"Five of the six biggest manufacturing industries — Machinery; Computer & Electronic Products; Food, Beverage & Tobacco Products; Transportation Equipment; and Chemical Products — registered moderate-to-strong growth in April.

"Manufacturing performed well for the 23rd straight month, with demand registering slower month-over-month growth (likely due to extended lead times and decades-high material price increases) and consumption softening (due to labor force constraints). Overseas partners are experiencing COVID-19 impacts, creating a near-term headwind for the U.S. manufacturing community. Fifteen percent of panelists' general comments expressed concern about their Asian partners' ability to deliver reliably in the summer months, up from 5 percent in March," says Fiore.

Seventeen manufacturing industries reported growth in April, in the following order: Apparel, Leather & Allied Products; Machinery; Plastics & Rubber Products; Nonmetallic Mineral Products; Computer & Electronic Products; Food, Beverage & Tobacco Products; Transportation Equipment; Printing & Related Support Activities; Electrical Equipment, Appliances & Components; Paper Products; Primary Metals; Furniture & Related Products; Chemical Products; Textile Mills; Fabricated Metal Products; Miscellaneous Manufacturing; and Wood Products. The only industry reporting a decrease in April compared to March is Petroleum & Coal Products.

WHAT RESPONDENTS ARE SAYING

• "Tier-2 supplier shutdowns in Shanghai are causing a ripple effect for our suppliers in other parts of China. Long delays at ports, including in the U.S., are still providing supply challenges. Inflation is out of control. Fuel costs, and therefore freight costs, are leading the upward cycle. At some point, the economy must give way; it will be tough to have real growth with such pressure on costs. Despite the issues and poor outlook, business remains brisk." [Chemical Products]
• "Continued strong demand with improvements in the supply chain. Delays still exist, but supply issues are slowly improving. Cost increases in multiple categories." [Transportation Equipment]
• "Supply chain is still constrained, and prices continue to rise. We are focusing on ways to stay profitable while continuing to fill customer orders. Relationship management and strong negotiation skills are extremely important right now." [Food, Beverage & Tobacco Products]
• "New order entries are still very strong. Unfortunately, logistics issues have (not) yet improved, so lead times remain extended." [Machinery]
• "Due to electronic component supply chain issues, production output has been lower than normal. Backlog is growing due to the supply chain issues. New order sales are steady, except international orders are lower." [Fabricated Metal Products]
• "Business is strong. Backlog continues to grow due to new orders and inconsistent supply chain conditions. Shortages of components are the main factor limiting our production." [Electrical Equipment, Appliances & Components]
• "The shutdowns in China due to a new COVID-19 wave are causing supply concerns for late second quarter and early third quarter. We have extended lead times to customers and are ordering product from China to cover demand through Q4 and early 1Q 2023." [Miscellaneous Manufacturing]
• "Overall, improvements in supply chain are occurring on larger scale items, but we see suppliers that sell us low-volume items struggling in some cases with getting feed stocks and raw materials they need. Freight continues to plague things as well." [Nonmetallic Mineral Products]
• "Business is still very robust. Material price increases continue to be passed on (to customers) based on costs of raw materials, logistics and labor to produce products." [Plastics & Rubber Products]

Manufacturing ISM^® Report On Business^® data is seasonally adjusted for the New Orders, Production, Employment and Inventories indexes.
*Number of months moving in current direction.

COMMODITIES REPORTED UP/DOWN IN PRICE AND IN SHORT SUPPLY

Commodities Up in Price
Adhesives and Paint (5); Aluminum (23); Aluminum Products (4); Brass (2); Caustic Soda (2); Copper (4); Corrugate (3); Corrugated Packaging (18); Diesel Fuel (16); Electrical Components (17); Electronic Components (17); Energy (2); Epoxy; Freight (18); High-Density Polyethylene (HDPE); Hydraulic Components (2); Labor — Temporary (12); Lumber (5); Natural Gas* (10); Nickel (2); Packaging Supplies (17); Paper (2); Plastic Resins (4); Plywood (2); Polypropylene (2); Polyvinyl Chloride (PVC); Resin Based Products; Rubber Based Products (9); Solvents (3); Soy Based Products (4); Steel (21); Steel — Cold Rolled; Steel — Hot Rolled (2); Steel — Stainless (18); Steel Products (20); and Titanium Dioxide.

Commodities Down in Price
Natural Gas*.

Commodities in Short Supply
Aluminum (6); Cable Assemblies (2); Caustic Soda (2); Corrugated Boxes; Electrical Components (19); Electronic Components (17); Freight (2); Hydraulic Valves; Labor — Temporary (12); Nylon; Paper; Resin Based Products (2); Semiconductors (17); Soy Based Products; Steel (3); Steel — Stainless (2); Steel Products; and Steel Wire Products.

Note: The number of consecutive months the commodity is listed is indicated after each item.
*Indicates both up and down in price.

APRIL 2022 MANUFACTURING INDEX SUMMARIES

Manufacturing PMI^®
Manufacturing grew in April, as the Manufacturing PMI^® registered 55.4 percent, 1.7 percentage points lower than the March reading of 57.1 percent. The 55.4-percent reading is the same as in August and September 2020 and the lowest since July 2020, when the composite index registered 53.9 percent. "The Manufacturing PMI^® continued to indicate solid sector expansion and U.S. economic growth in April. All five subindexes that directly factor into the Manufacturing PMI^® were in growth territory. Of the six biggest manufacturing industries, five — Machinery; Computer & Electronic Products; Food, Beverage & Tobacco Products; Transportation Equipment; and Chemical Products — registered moderate-to-strong growth in April. The New Orders and Production indexes remained in expansion territory. The Supplier Deliveries Index slowed at a faster rate and the Inventories Index decreased, indicating increased supply chain congestion. All 10 of the subindexes were positive for the period; a reading of 'too low' for the Customers' Inventories Index is considered a positive for future production," says Fiore. A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.

A Manufacturing PMI^® above 48.7 percent, over a period of time, generally indicates an expansion of the overall economy. Therefore, the April Manufacturing PMI^® indicates the overall economy grew in April for the 23rd consecutive month following contraction in April and May 2020. "The past relationship between the Manufacturing PMI^® and the overall economy indicates that the Manufacturing PMI^® for April (55.4 percent) corresponds to a 2.3-percent increase in real gross domestic product (GDP) on an annualized basis," says Fiore.

THE LAST 12 MONTHS

New Orders
ISM^®'s New Orders Index registered 53.5 percent in April, a decrease of 0.3 percentage point compared to the 53.8 percent reported in March. This indicates that new orders grew for the 23rd consecutive month. "Of the six largest manufacturing sectors, five — Computer & Electronic Products; Transportation Equipment; Food, Beverage & Tobacco Products; Machinery; and Chemical Products — increased new orders at moderate-to-strong levels. Price elevation, near-record lead times and panelists' full order books resulted in a continuing pause in new order rates across the supply chain. Backlog and customer inventories remain at strong levels, indicating that demand remains strong in spite of this month's slowing of new order expansion," says Fiore. A New Orders Index above 52.9 percent, over time, is generally consistent with an increase in the Census Bureau's series on manufacturing orders (in constant 2000 dollars).

Of the 18 manufacturing industries, 11 reported growth in new orders in April, in the following order: Printing & Related Support Activities; Computer & Electronic Products; Transportation Equipment; Food, Beverage & Tobacco Products; Furniture & Related Products; Paper Products; Fabricated Metal Products; Machinery; Miscellaneous Manufacturing; Chemical Products; and Plastics & Rubber Products. The three industries reporting a decline in new orders in April are: Textile Mills; Primary Metals; and Electrical Equipment, Appliances & Components.

Production
The Production Index registered 53.6 percent in April, 0.9 percentage point lower than the March reading of 54.5 percent, indicating growth for the 23rd consecutive month. "Of the top six industries, five — Food, Beverage & Tobacco Products; Transportation Equipment; Machinery; Computer & Electronic Products; and Chemical Products — expanded in April. Demand remains strong: Hiring and material availability continue to show signs of improvement, but factories are still struggling to hit optimum output rates — primarily due to high levels of employee turnover, which is causing productivity loss on the factory floor," says Fiore. An index above 52.4 percent, over time, is generally consistent with an increase in the Federal Reserve Board's Industrial Production figures.

The 14 industries reporting growth in production during the month of April — listed in order — are: Printing & Related Support Activities; Nonmetallic Mineral Products; Food, Beverage & Tobacco Products; Primary Metals; Wood Products; Plastics & Rubber Products; Transportation Equipment; Machinery; Computer & Electronic Products; Miscellaneous Manufacturing; Paper Products; Furniture & Related Products; Electrical Equipment, Appliances & Components; and Chemical Products. The two industries reporting a decrease in April are: Textile Mills; and Fabricated Metal Products.

Employment
ISM^®'s Employment Index registered 50.9 percent in April, 5.4 percentage points below the March reading of 56.3 percent. "The index reported an eighth consecutive month of expansion. Of the six big manufacturing sectors, five (Transportation Equipment; Machinery; Food, Beverage & Tobacco Products; Computer & Electronic Products; and Chemical Products) expanded. Survey panelists' companies are still struggling to meet labor management plans, with fewer signs of improvement compared to March: A smaller share of comments (1 percent in April, down from 12 percent in March) noted greater hiring ease. An overwhelming majority of panelists again indicate their companies are hiring, as 89 percent of Employment Index comments were hiring focused. Among those respondents, 34 percent expressed difficulty in filling positions, up from 28 percent in March. Turnover rates remain elevated (39 percent of comments cited backfills and retirements, an increase from 30 percent in March), and there were fewer indications of hiring improvement. Employment levels, driven primarily by turnover and a smaller labor pool, remain the top issue affecting further output growth," says Fiore. An Employment Index above 50.5 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) data on manufacturing employment.

Of 18 manufacturing industries, nine industries reported employment growth in April, in the following order: Apparel, Leather & Allied Products; Textile Mills; Electrical Equipment, Appliances & Components; Transportation Equipment; Machinery; Primary Metals; Food, Beverage & Tobacco Products; Computer & Electronic Products; and Chemical Products. The six industries reporting a decrease in employment in April — in the following order — are: Printing & Related Support Activities; Paper Products; Petroleum & Coal Products; Miscellaneous Manufacturing; Plastics & Rubber Products; and Fabricated Metal Products.

Supplier Deliveries^†
The delivery performance of suppliers to manufacturing organizations was slower in April, as the Supplier Deliveries Index registered 67.2 percent, 1.8 percentage points higher than the 65.4 percent reported in March. Of the six top manufacturing industries, five (Food, Beverage & Tobacco Products; Computer & Electronic Products; Machinery; Chemical Products; and Transportation Equipment) reported slower deliveries. "Deliveries slowed at a faster rate compared to the previous month. The index continues to reflect suppliers' difficulties in meeting demand from panelists' companies. April saw suppliers reentering a labor-constrained environment, according to panelists' comments, and transportation networks are again demonstrating less flexibility. Among supplier delivery comments, 7 percent noted a stable month-over-month improvement, compared to March. Improvement in the index will be tepid for the rest of the second quarter due to continuing labor issues and the expected impact of recent China lockdowns," says Fiore. A reading below 50 percent indicates faster deliveries, while a reading above 50 percent indicates slower deliveries.

Of 18 manufacturing industries, 16 reported slower supplier deliveries in April, in the following order: Apparel, Leather & Allied Products; Plastics & Rubber Products; Textile Mills; Paper Products; Food, Beverage & Tobacco Products; Printing & Related Support Activities; Computer & Electronic Products; Machinery; Primary Metals; Furniture & Related Products; Chemical Products; Fabricated Metal Products; Miscellaneous Manufacturing; Nonmetallic Mineral Products; Transportation Equipment; and Electrical Equipment, Appliances & Components. No industry reported faster supplier deliveries in April as compared to March.

Inventories
The Inventories Index registered 51.6 percent in April, 3.9 percentage points lower than the 55.5 percent reported for March. "Manufacturing inventories expanded at a slower rate compared to March. Of the six big manufacturing industries, Petroleum & Coal Products; and Food, Beverage & Tobacco Products had the largest impact on the weakening manufacturing inventory number. Manufacturing inventories should return to higher expansion levels as we close Q2," says Fiore. An Inventories Index greater than 44.4 percent, over time, is generally consistent with expansion in the Bureau of Economic Analysis (BEA) figures on overall manufacturing inventories (in chained 2000 dollars).

The 11 industries reporting higher inventories in April — in the following order — are: Apparel, Leather & Allied Products; Textile Mills; Nonmetallic Mineral Products; Electrical Equipment, Appliances & Components; Paper Products; Machinery; Chemical Products; Plastics & Rubber Products; Transportation Equipment; Fabricated Metal Products; and Computer & Electronic Products. The three industries reporting contracting inventories in April are: Petroleum & Coal Products; Miscellaneous Manufacturing; and Food, Beverage & Tobacco Products.

Customers' Inventories^†
ISM^®'s Customers' Inventories Index registered 37.1 percent in April, 3 percentage points higher than the 34.1 percent reported for March, indicating that customers' inventory levels were considered much too low, even with the month-over-month increase. "Customers' inventories are too low for the 67th consecutive month, a positive for future production growth. For 21 straight months, the Customers' Inventories Index has been at historically low levels," says Fiore.

Only Apparel, Leather & Allied Products reported customers' inventories as too high in April. The 13 industries reporting customers' inventories as too low during April — listed in order — are: Nonmetallic Mineral Products; Plastics & Rubber Products; Transportation Equipment; Machinery; Fabricated Metal Products; Wood Products; Primary Metals; Miscellaneous Manufacturing; Computer & Electronic Products; Chemical Products; Furniture & Related Products; Food, Beverage & Tobacco Products; and Electrical Equipment, Appliances & Components.

Prices^† 
The ISM^® Prices Index registered 84.6 percent, down 2.5 percentage points compared to the March reading of 87.1 percent, indicating raw materials prices increased for the 23rd consecutive month, at a slower rate in April. The Prices Index has exceeded 70 percent in 16 out of the last 17 months and been above 60 percent for 20 straight months. "Oil and fuel price increases (manifesting in higher transportation expenses), food ingredients, commodity materials (copper, steel and aluminum) and petroleum-derived products (chemicals and plastics) were the primary causes of prices growth. Notably, 4.4 percent of respondents reported lower prices in April, a positive for the future," says Fiore. A Prices Index above 52.6 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) Producer Price Index for Intermediate Materials.

In April, 17 of 18 industries reported paying increased prices for raw materials, in the following order: Apparel, Leather & Allied Products; Paper Products; Plastics & Rubber Products; Textile Mills; Primary Metals; Machinery; Food, Beverage & Tobacco Products; Furniture & Related Products; Miscellaneous Manufacturing; Transportation Equipment; Computer & Electronic Products; Fabricated Metal Products; Chemical Products; Electrical Equipment, Appliances & Components; Nonmetallic Mineral Products; Printing & Related Support Activities; and Wood Products. Only Petroleum & Coal Products reported paying decreased prices for raw materials in April.

Backlog of Orders^†
ISM^®'s Backlog of Orders Index registered 56 percent in April, a 4-percentage point decrease compared to the 60 percent reported in March, indicating order backlogs expanded for the 22nd straight month. "Backlogs expanded in April, albeit at a slower rate, as output remains constrained and new orders continue at moderate levels," says Fiore. Of the six big manufacturing sectors, three reported expanded backlogs: Computer & Electronic Products; Machinery; and Transportation Equipment.

Ten industries reported growth in order backlogs in April, in the following order: Apparel, Leather & Allied Products; Computer & Electronic Products; Paper Products; Machinery; Plastics & Rubber Products; Furniture & Related Products; Transportation Equipment; Electrical Equipment, Appliances & Components; Fabricated Metal Products; and Miscellaneous Manufacturing. The two industries reporting lower backlogs in April are: Textile Mills; and Chemical Products. Six industries reported no change in order backlogs in April as compared to March.

New Export Orders^†
ISM^®'s New Export Orders Index registered 52.7 percent in April, down 0.5 percentage point compared to the March reading of 53.2 percent. "The New Export Orders Index grew for the 22nd consecutive month, at a slower rate in April. Customer demand from overseas remains suppressed due to COVID-19 in Asia and the war in Ukraine. Of the six big industry sectors, five (Food, Beverage & Tobacco Products; Transportation Equipment; Computer & Electronic Products; Machinery; and Chemical Products) expanded," says Fiore.

The five industries reporting growth in new export orders in April are: Food, Beverage & Tobacco Products; Transportation Equipment; Computer & Electronic Products; Machinery; and Chemical Products. The only industry reporting a decrease in new export orders in April is Paper Products. Twelve industries reported no change in exports in April as compared to March.

Imports^†
ISM^®'s Imports Index registered 51.4 percent in April, a decrease of 0.4 percentage point compared to March's figure of 51.8 percent. "Imports expanded in April, but the index again posted its lowest reading since it contracted (49.1 percent) in October 2021. Import demand remains strong but will likely continue to be challenged through the Q2 and Q3 of 2022, due to COVID-19 in Asia and upcoming union and management negotiations at West Coast ports," says Fiore.

The four industries reporting growth in imports in April are: Wood Products; Food, Beverage & Tobacco Products; Computer & Electronic Products; and Chemical Products. Six industries — in the following order — reported lower volumes of imports in April: Paper Products; Electrical Equipment, Appliances & Components; Transportation Equipment; Miscellaneous Manufacturing; Fabricated Metal Products; and Machinery. Eight industries reported no change in imports in April.

^†The Supplier Deliveries, Customers' Inventories, Prices, Backlog of Orders, New Export Orders, and Imports indexes do not meet the accepted criteria for seasonal adjustments.

Buying Policy
The average commitment lead time for Capital Expenditures in April was 173 days, an increase of one day compared to March to match the all-time high set two months ago. (ISM^® began tracking lead times data in 1987.) CapEx lead times have increased in nine of the last 12 months, for a net gain of 25 days since May 2021 (148 days). Average lead time in April for Production Materials increased by four days, to 100 days, a new record. Production Materials lead times have increased in nine of the last 12 months, for a net gain of 15 days since May 2021 (85 days). Average lead time for Maintenance, Repair and Operating (MRO) Supplies increased one day, to 49 days. 

About This Report
DO NOT CONFUSE THIS NATIONAL REPORT with the various regional purchasing reports released across the country. The national report's information reflects the entire U.S., while the regional reports contain primarily regional data from their local vicinities. Also, the information in the regional reports is not used in calculating the results of the national report. The information compiled in this report is for the month of April 2022.

The data presented herein is obtained from a survey of manufacturing supply executives based on information they have collected within their respective organizations. ISM^® makes no representation, other than that stated within this release, regarding the individual company data collection procedures. The data should be compared to all other economic data sources when used in decision-making.

Data and Method of Presentation
The Manufacturing ISM^® Report On Business^® is based on data compiled from purchasing and supply executives nationwide. The composition of the Manufacturing Business Survey Committee is stratified according to the North American Industry Classification System (NAICS) and each of the following NAICS-based industry's contribution to gross domestic product (GDP): Food, Beverage & Tobacco Products; Textile Mills; Apparel, Leather & Allied Products; Wood Products; Paper Products; Printing & Related Support Activities; Petroleum & Coal Products; Chemical Products; Plastics & Rubber Products; Nonmetallic Mineral Products; Primary Metals; Fabricated Metal Products; Machinery; Computer & Electronic Products; Electrical Equipment, Appliances & Components; Transportation Equipment; Furniture & Related Products; and Miscellaneous Manufacturing (products such as medical equipment and supplies, jewelry, sporting goods, toys and office supplies). The data are weighted based on each industry's contribution to GDP. According to the BEA estimates for 2020 GDP (released December 22, 2021), the six largest manufacturing subsectors are: Computer & Electronic Products; Chemical Products; Transportation Equipment; Petroleum & Coal Products; Food, Beverage & Tobacco Products; and Machinery. Beginning in February 2018 with January 2018 data, computation of the indexes is accomplished utilizing unrounded numbers.

Survey responses reflect the change, if any, in the current month compared to the previous month. For each of the indicators measured (New Orders, Backlog of Orders, New Export Orders, Imports, Production, Supplier Deliveries, Inventories, Customers' Inventories, Employment and Prices), this report shows the percentage reporting each response, the net difference between the number of responses in the positive economic direction (higher, better and slower for Supplier Deliveries) and the negative economic direction (lower, worse and faster for Supplier Deliveries), and the diffusion index. Responses are raw data and are never changed. The diffusion index includes the percent of positive responses plus one-half of those responding the same (considered positive).

The resulting single index number for those meeting the criteria for seasonal adjustments (Manufacturing PMI^®, New Orders, Production, Employment and Inventories) is then seasonally adjusted to allow for the effects of repetitive intra-year variations resulting primarily from normal differences in weather conditions, various institutional arrangements, and differences attributable to non-moveable holidays. All seasonal adjustment factors are subject annually to relatively minor changes when conditions warrant them. The Manufacturing PMI^® is a composite index based on the diffusion indexes of five of the indexes with equal weights: New Orders (seasonally adjusted), Production (seasonally adjusted), Employment (seasonally adjusted), Supplier Deliveries, and Inventories (seasonally adjusted).

Diffusion indexes have the properties of leading indicators and are convenient summary measures showing the prevailing direction of change and the scope of change. A Manufacturing PMI^® reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally declining. A Manufacturing PMI^® above 48.7 percent, over a period of time, indicates that the overall economy, or gross domestic product (GDP), is generally expanding; below 48.7 percent, it is generally declining. The distance from 50 percent or 48.7 percent is indicative of the extent of the expansion or decline. With some of the indicators within this report, ISM^® has indicated the departure point between expansion and decline of comparable government series, as determined by regression analysis. The Manufacturing ISM^® Report On Business^® survey is sent out to Manufacturing Business Survey Committee respondents the first part of each month. Respondents are asked to report on information for the current month for U.S. operations only. ISM^® receives survey responses throughout most of any given month, with the majority of respondents generally waiting until late in the month to submit responses to give the most accurate picture of current business activity. ISM^® then compiles the report for release on the first business day of the following month.

The industries reporting growth, as indicated in the Manufacturing ISM^® Report On Business^® monthly report, are listed in the order of most growth to least growth. For the industries reporting contraction or decreases, those are listed in the order of the highest level of contraction/decrease to the least level of contraction/decrease.

Responses to Buying Policy reflect the percent reporting the current month's lead time, the approximate weighted number of days ahead for which commitments are made for Capital Expenditures; Production Materials; and Maintenance, Repair and Operating (MRO) Supplies, expressed as hand-to-mouth (five days), 30 days, 60 days, 90 days, six months (180 days), a year or more (360 days), and the weighted average number of days. These responses are raw data, never revised, and not seasonally adjusted.

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About Institute for Supply Management^®
Institute for Supply Management^® (ISM^®) serves supply management professionals in more than 90 countries. Its 50,000 members around the world manage about US$1 trillion in corporate and government supply chain procurement annually. Founded in 1915 as the first supply management institute in the world, ISM is committed to advancing the practice of supply management to drive value and competitive advantage for its members, contributing to a prosperous and sustainable world. ISM leads the profession through the ISM Report On Business^®, its highly regarded certification programs and the ISM Advance^™ Digital Platform. This report has been issued by the association since 1931, except for a four-year interruption during World War II.

The full text version of the Manufacturing ISM^® Report On Business^® is posted on ISM^®'s website at www.ismrob.org on the first business day* of every month after 10:00 a.m. ET.

The next Manufacturing ISM^® Report On Business^® featuring May 2022 data will be released at 10:00 a.m. ET on Wednesday, June 1, 2022.

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