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US manufacturing growth slows amid price pressures

The US manufacturing sector expanded in April for the 21st month running but the pace slowed as companies faced higher prices for material inputs, according to a private survey published on Monday.

The Institute for Supply Management said its manufacturing index, based on a survey of purchasing managers, stood at 60.4 percent in April, down from 61.2 percent in March.

It was the fourth consecutive month of growth above 60.0 percent on the purchasing managers index for manufacturing, the sector driving the US economic recovery from the worst recession in decades.

The average analyst forecast
was for a sharper slowdown to a PMI reading of 59.7 percent. Fifty percent is the break-even point between expansion and contraction.

Growth in new orders, production, employment and supplier deliveries slowed.

"While the manufacturing sector is definitely performing above most expectations so far in 2011, manufacturers are experiencing significant cost pressures from commodities and other inputs," Norbert Ore, head of the ISM's manufacturing committee, said in a statement.

Prices on the PMI jumped to 85.5 percent in April from 85.0 percent in March. That was the highest price reading since July 2008, when the index registered 88.5 percent as crude oil prices hit a record $147 a barrel.

"This ISM manufacturing index is fitting into the classic pattern of a firming economic recovery," said John Ryding at RDQ Economics.

14:38 | |

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