U.S. manufacturing operating conditions rebound in April, manufacturing IHS index rises to 56.5

U.S. manufacturing sector’s operating conditions saw a steep rebound in April, showed the April survey data. The seasonally adjusted IHS Markit final U.S. Manufacturing PMI rose to 56.5 in April from March’s 55.6 and indicated the strongest manufacturing growth in more than three-and-a-half years. The rate of rebound was also well above the series trend.

More rapid rates of output and new order growth and a greater fall in vendor performance contributed to the higher index reading. Growth of goods production accelerated in April, with the pace of rise reaching the most rapid since January 2017. Anecdotal evidence implied the steep rise was because of greater new order volumes and the acquisition of new clients.

Reflective of stronger client demand, new business received by manufacturers rose at an accelerated rate that was the most rapid since September 2014. However, new export sales continued to rise at a modest rate that was similar to that seen in March. As the rate of new order growth continued to surpass that of output, the level of outstanding business rose again in April. Meanwhile, employment growth weakened slightly, with the rate of job creation falling to an eight-month low, although remaining strong.

Greater global demand for raw materials and recently introduced tariffs were reportedly key factors behind greater cost burdens in April. Furthermore, the pace of input price inflation accelerated to the sharpest in nearly 7 years. In the meantime, average prices charged rose at the most rapid rate since June 2011, with the pace of inflation accelerating for the fourth straight month. Survey respondents noted that higher charges were because of increased costs being passed on to clients.

Purchasing activity rose further in April, with growth accelerating to the most solid in more than three-and-a-half years. However, companies expressed difficulties in sourcing inputs as supplier delivery times lengthened to the greatest degree since February 2014. Meanwhile, business sentiment toward the year-ahead output outlook remained strong in the midst of a sustained rise in new orders. Optimism was the second-highest since June 2015.

At 20:00 GMT the FxWirePro's Hourly Strength Index of US Dollar was highly bullish at 131.496. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex
 

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