Activity in the factory sector moderated again last month. The ISM manufacturing sector composite index for April declined to 57.3, its lowest level in nine months. Despite the decline, the index remained near the highest point since May 2004. A level of 58.5 had been expected in the Action Economics Forecast Survey. During the last ten years, there has been a 76% correlation between the level of the index and q/q growth in real GDP.

Most of the component series fell last month, led by a decline in the production index to the lowest level since November 2016. The inventories series also declined and was down sharply from the February high. The new orders reading eased modestly following three months of significant decline. The supplier delivery index rose modestly.

The employment figure declined sharply to the lowest point in three months. A stable 23% (NSA) of respondents reported higher employment while a steady 10% indicated a decline. During the last ten years, there has been an 87% correlation between the index and the m/m change in factory sector employment.

The prices paid index strengthened to 79.3. It was the highest level since April 2011 and up from the 2016 low of 33.5. A strengthened 61% percent (NSA) of respondents reported paying higher prices while three percent paid less.

Amongst the separate series measured by the ISM, the export order index fell to the lowest level since December. It remained up sharply, however, from the 2015 low. The import order index also eased to the lowest point since December, but remained up sharply from the 2015 low as well. The order backlog series remained strong at the highest level since May 2004.

The ISM figures are diffusion indexes where a reading above 50 indicates increase. The figures from the Institute for Supply Management can be found in Haver's USECON database. The expectations number is available in Haver's AS1REPNA database.