U.S. ISM nonmanufacturing index eases in April

The U.S. ISM nonmanufacturing index eased in the month of April. The index fell to 56.8 from March’s 58.8. This was below consensus expectations of 58. The fall in April was mainly driven by a decline in the business activity index and the employment index. Suppliers’ deliveries continued to decelerate, albeit at a slower rate in April. Moreover, the backlog of orders also rose.

On the other hand, the index on new orders rose, as did the index on new export orders, implying that demand for services continues to be in place, stated Barclays in a research report. Companies recorded an expected rise in prices in April, which is consistent with what businesses in the manufacturing sector recorded in the ISM survey, published yesterday.

The press release stated that “respondents have expressed concern regarding the uncertainty about tariffs and the effect on the cost of goods”. This appears to be a recurring theme throughout business and consumer sentiment surveys conducted in the last two months. However, in spite of the moderation, the ISM nonmanufacturing index continues to be at levels in line with sound services sector activity.

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