The S&P Global Manufacturing Purchasing Managers’ Index (PMI) dropped from March’s 54.7 to 54.4 in April, the lowest value since November 2020. However, the index remained above the critical 50-point threshold that separates an expansion from a contraction in manufacturing sector activity.
April’s reading chiefly reflected a sharper fall in new orders and a weaker pace of job creation. However, production rebounded, albeit mildly. Meanwhile, backlogs of work increased amid severe supply disruptions and supplier delays. On the price front, input costs surged amid soaring costs for a range of raw materials, while output prices rose at the second-highest pace on record. Lastly, output expectations picked up, although confidence was relatively weak due to concerns about inflation.
Commenting on the release, Siân Jones, senior economist at S&P Global, stated:
“The impact of inflationary pressures and Russia’s invasion of Ukraine on customer confidence has led to a further downward revision in our forecast for industrial production during 2022, with only a 0.6% increase now expected over the year.”
FocusEconomics panelists see fixed investment expanding 6.3% in 2022, which is unchanged from last month’s projection, and growing 5.2% in 2023.