U.S. ISM Manufacturing Index (April 2026)

ISM Manufacturing Index Shows Prices Surged Again in April

• The ISM Manufacturing Index was unchanged at 52.7 in April, remaining in expansionary territory for a fourth consecutive month (the longest such streak since mid-2022), and was not far from the market consensus forecast of 53.0.
• Growth across industries remained broad, with 13 of 18 manufacturing sectors reporting expansion, the same as in March. Roughly 19% of manufacturing GDP was still in contraction (up from 16% in March), though this remains much improved from late 2025 levels.
• New orders picked up by 0.6 points to 54.1 in April, while production eased by 1.7 points to 53.4, leaving both components still comfortably above the 50-point expansion threshold. Meanwhile, the employment index fell deeper into contractionary territory (down 2.3 points to 46.4), reflecting a continued soft hiring backdrop.
• Trade-related indicators weakened. Exports fell further into contractionary territory (down 2.0 points to 47.9), while imports slowed to near-stagnation (down 2.3 points to 50.3, still just above no change levels).
• Price pressures escalated sharply last month. The prices-paid index surged 6.3 points to 84.6 – its highest reading since April 2022, up more than 25 points over the last three months. This leap reflects mounting input cost inflation (driven by war-related energy and materials spikes), with the index now back around levels from the 2022 inflation surge (when consumer inflation spiked ~8.3% year-on-year). The supplier deliveries index also rose to 60.6 (up 1.7 points) – also its highest level since mid-2022 – indicating increasingly slower deliveries amid intensifying supply chain strains.
• Survey commentary remained largely downbeat. Roughly two-thirds of respondents’ comments were negative (69%, similar to March), with nearly half of all comments mentioning the war in the Middle East and about one-fifth citing tariffs. One comment in the Chemical Products industry noted: “All products tied to crude, polyethylene resin or energy have seen multiple increase spikes tied to the Iran crisis and market supply inflation."

Key Implications

• The April ISM report suggests the U.S. manufacturing sector’s recent rebound may be leveling off, underlining a still fragile expansion. Stable headline PMI and a diminished production index highlight cooling momentum, even as new orders growth persists. Continued softness in employment and a drop in order backlogs reinforce that the upturn faces headwinds, raising the risk that the manufacturing recovery could pause rather than accelerate further.
• Soaring input costs and supply-side strains are the most prominent warning signs. The prices-paid index’s steep climb to multi-year highs – alongside the conspicuous slowdown in supplier deliveries – signals mounting supply-chain stress and inflationary pressures driven by surging energy prices and war-related disruptions. With cost indices now at levels last seen during the 2022 inflation surge, businesses face intensifying margin pressures and elevated uncertainty, which will likely restrain near-term investment and production plans. Moreover, these resurgent price pressures are keeping the Federal Reserve on alert, supporting expectations that any additional monetary policy easing is unlikely in the near term.

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