The US ISM PMI had fallen to 1 year low in April 2022.

 

The prices subindex had eased to 84.6 (-2.5) but still remained at an elevated level based on the historical average. In view of the sky-high inflation, the producers reduced their inventories to 51.6 (-3.9) by purchasing lesser local raw material (Est’d -3.5) and importing lesser (51.4, -0.4).

The supplier’s deliveries increased to 67.2 (+1.8) which meant slower deliveries because of supply disruption from China. The producers still had difficulties finding workers because of a huge job mismatch between job demand and supply which caused a decrease in employment to 50.9 (-5.4).

The producers reduced their production (53.6, -0.9) because of declines in new orders (53.5, -0.3) and new export orders (52.7, -0.5). However, the slight increase in the new local order (Est’d +0.2) couldn’t reverse the downtrend in new orders.

Consequently, the declines in the new orders caused customers’ inventories to rise to 37.1 (+3) and the backlog of order to decrease to 56 (-4) since there were lesser unfilled orders.

Therefore, all these factors caused the PMI to decrease to 55.3 (-1.7) in April 2022. The front-loading orders phenomenon which was caused by the skyrocketing inflation seemed to be over as the consumers had cut back on their spending. Overall, the US PMI is expected to have a downward trajectory in 2022.

The number of producers anticipating higher new orders had fallen to 25.1 in April which meant that consumers were cutting back on their spending.

The number of producers expecting higher production had increased to 27.5%.  This meant that they would try to ramp up their production to replenish the low customers' inventories.

The number of producers who wanted to hire more workers had dropped to 21% because of the huge mismatch in job demand and supply.