February 9, 2023

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April US ISM manufacturing 60.7 vs 65.0 expected

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April US manufacturing survey from the ISM:

ISM manufacturing
  • Prior was 64.7 (was highest since 1983)
  • Prices paid 89.6 vs 86.0 expected (85.6 prior)
  • New orders 64.3 vs 68.0 prior
  • Employment 55.1 vs 59.6 prior

If you go by the comments in the report, this is more about supply shortages rather than a dip in demand.

  • “The current electronics/semiconductor shortage is having tremendous
    impacts on lead times and pricing. Additionally, there appears to be a
    general inflation of prices across most, if not all, supply lines.”
    (Computer & Electronic Products)
  • “Upstream producers/suppliers are back online and working towards
    full rates. Demand is outpacing supply and will continue into the third
    quarter, when the supply chain is expected to be refilled. Supply/demand
    should be more balanced in Q3/Q4, but demand will continue as customers
    run hard to meet their demand and rebuild inventory.” (Chemical
  • “Continued strong sales; however, we have had to trim some
    production due to the global chip shortage. Hasn’t affected inventories
    greatly yet, but a continued decrease will begin to reduce available
    inventories if we don’t recover chip supply shortly.” (Transportation
  • “Business is picking up as restaurants open.” (Food, Beverage & Tobacco Products)
  • “Oil production has been steady, along with market prices and capital expenditures.” (Petroleum & Coal Products)
  • “Steel prices are crazy high. The normal checks on the domestic
    steel mills are not functioning – imported steel is distorted by the
    Section 232 tariffs.” (Fabricated Metal Products)
  • “It’s getting much more difficult to supply production with
    materials that are made with copper or steel. Lots of work on the floor,
    but I am worried about getting the materials to support.” (Electrical
    Equipment, Appliances & Components)
  • “Market capacity in most areas is oversold, with no realistic
    improvement on the horizon. In fact, it appears that demand will
    continue to strengthen, leading to more significant disruptions.”
    (Furniture & Related Products)
  • “In 35 years of purchasing, I’ve never seen everything like these
    extended lead times and rising prices – from colors, film, corrugate to
    resins, they’re all up. The only thing plentiful at present, according
    to my spam filter, is personal protective equipment [PPE].” (Plastics
    & Rubber Products)
  • “The metals markets remain very challenging at best. Shortages of
    raw materials have increased, especially in aluminum and carbon steel.
    Prices continue to rapidly increase. Transportation and trucking [are]
    also a big challenge.” (Primary Metals)
  • “Demand continues to be very strong. Supply chain delays hamper our availability and ability to sell more.” (Machinery)

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