US Manufacturing Sector Faces Gloomy Outlook as ISM Index PlungesThe US manufacturing sector witnessed a significant setback in April, with the ISM manufacturing index registering its sharpest decline since November. Data released by the Institute for Supply Management (ISM) on Thursday showed that the manufacturing index dropped 0.3 points to 48.7, below the 50 - point threshold that separates expansion from contraction, indicating an overall shrinking manufacturing sector.

The US manufacturing sector witnessed a significant setback in April, with the ISM manufacturing index registering its sharpest decline since November. Data released by the Institute for Supply Management (ISM) on Thursday showed that the manufacturing index dropped 0.3 points to 48.7, below the 50 - point threshold that separates expansion from contraction, indicating an overall shrinking manufacturing sector. The production index plummeted by over 4 points to 44, and the input prices index edged up slightly. Tariff pressures and trade policy uncertainties are hampering the expansion of the manufacturing industry. New orders have declined for three consecutive months, and unfilled orders are decreasing at an accelerating pace, suggesting weak overall demand. The ISM report revealed that 11 industries, including apparel, petroleum, plastics, and rubber, experienced expansion, while 6 industries contracted.

In addition to sluggish demand, manufacturers are also grappling with rising costs. Despite the decline in energy prices, the materials price index has climbed to its highest level since June 2022. As the strategy of pre - importing to avoid tariffs comes to an end, the ISM manufacturing import index in April recorded its largest drop since the end of 2023. The combination of weak orders, slow - moving output, and falling backlogs is the main reason for the continuous decline in manufacturing employment for the third month in a row. The market anticipates that the government data to be released on Friday will show the first decline in manufacturing employment in three months. In terms of inventory, manufacturers remain cautious, with the ISM inventory index dropping to 50.8.

Timothy Fiore, Chair of the ISM Manufacturing Business Survey Committee, said, "In an uncertain economic environment, both demand and output are declining, and employment is continuously shrinking. Due to tariffs driving up costs, prices are rising faster, leading to backlogs of new orders, slower supply deliveries, and inventory growth." These figures suggest that the US manufacturing sector is facing a challenging period ahead, and the future trend of the industry remains to be seen.