ISM Shows Steady Growth for US Manufacturing in April

The Institute for Supply Management (ISM) has released its report for the American manufacturing industry, indicating steady growth for one of the country’s most vital sectors. For April, the American industry was given a manufacturing index of 57.3% by the ISM. Although that’s lower that the 59.3% rating from the month prior, it’s still well over the 50% mark. And any reading over 50% means the industry is growing and expanding.

So, what prompted the slower, albeit still positive, growth for the American manufacturing industry in April? Overall, the U.S. economy remains strong, with analysts saying that it’s expanding at its fastest rate in nearly a decade. However, this has also led to some inflation, with materials prices increasing for manufacturing companies.

There’s also the issue of tariffs on steel and aluminum imports. With foreign companies now being forced to pay a fee to import their metal products into the United States, American manufacturing companies are now experiencing the effects. They are paying more for materials, which in turn forces them to raise the prices of their own products. Even with these higher prices, however, most American manufacturing companies have reported strong sales and growth for the month of April — something that will likely continue in the months to come.

The general outlook for 2018 remains positive and upbeat as we see continued signs of a growing economy and investment in housing and infrastructure,” said Nonmetallic Mineral Products when speaking about the American manufacturing industry for the month of April.

The Federal Reserve has held steady regarding interest rates, but that may soon change as experts predict a rate hike could happen in the near future. Any increase of interest rates would likely have a ripple effect across the manufacturing industry and other sectors, restricting access to funds and hindering growth. However, the country’s overall economy and job market could overcome these challenges. As revealed from historical data, the American manufacturing industry is extremely resilient and able to adapt to market changes. According to some reports, more than 12 million Americans are employed in the manufacturing industry, making it one of the country’s largest employment sectors. In terms of production volume, the United States is the world’s second-largest manufacturer, surpassed only by China.

To recap, the ISM gave the American manufacturing industry a 57.3% rating for the month of April. With any rating over 50% indicating growth and expansion, it’s safe to assume the industry is healthy. However, higher materials prices has caused concern for some manufacturing companies.