U.S. ISM non-manufacturing index falls in April

The U.S. ISM’s non-manufacturing composite dropped 0.6 points to 55.5 in April, as compared with consensus expectations of 57. With the April reading, the index seems to be tracking the low end of the wide range of readings that has succeeded since early 2017. This range is in line with moderate growth in the non-manufacturing sector, in line with the gradual return to trend GDP growth that is expected in the course of the year, said Barclays in a research report.

Delving into details, they seem widely in line with ongoing easing in domestic demand, along with some rebound in external activity. The index of new orders dropped 0.9 points, to a still-strong 58.1, while the index for employment dropped 2.2 points to 53.7. Meanwhile, the index for new export orders rose 4.5 points to 57. This is in line with the rebound seen in external demand that possibly cushioned the aforementioned falls in overall new orders – and the index for imports rose 3.5 points to 55.

The index for business activity rose 2.1 point to 59.5. Indices that reflect production bottlenecks, including the speed of supplier deliveries and order backlogs, widely imply that issues with tight resource utilization were moderate in April. Inventory indicators indicate that producers made little net change to their inventory position in March, while the indicator of inventory sentiment suggests that non-manufacturing producers still see their positions as too high, added Barclays.

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