Manufacturing Malaise: April PMI Forecasts Continued Contraction

The April 2025 ISM Manufacturing PMI reading will be reported today, May 1, 2025, at 10:00 a.m. ET, and should reflect a further contraction in U.S. manufacturing. Economists are expecting a reading of about 47.9–48.0, just below last month's level of 49.0 which already showed that the sector fell into contraction for the first time in a cycle following a razor-thin one-month-long expansion in February. Market participants will be keenly watching this data for signs of the health and direction of the manufacturing sector.

In March 2025, the ISM Manufacturing PMI stood at 49.0 relative to sub-indices: New Orders at 45.2, Production at 48.3, and Employment at 44.7, all indicating contraction. Inventories rose to 53.4, and Prices stayed high at 69.4. These numbers reflect underlying problems such as weakening demand and chronic inflationary pressures.

Friday's release will be of utmost importance, any deviation from the forecasted PMI at 47.9-48.0 to impact market activity. Particular attention will be provided to sub-indices Employment and New Orders to determine signs of stabilization or more weakening. Besides this, movement in the Prices Paid index will be closely monitored by inflation watchers.