WASHINGTON – Manufacturing activity across the United States maintained stability during April, though companies faced mounting pressure from escalating input costs that reached their highest point in four years due to Middle East shipping disruptions.
The Institute for Supply Management released data Friday showing their manufacturing index held at 52.7 for the month, matching March’s figure and staying near a four-year peak. Any reading above 50 signals growth in the manufacturing sector, marking the fourth consecutive month of expansion.
Industry analysts surveyed by Reuters had anticipated the index would climb to 53. The steady performance was supported by rising new orders, which increased to 54.1 from March’s 53.5, as companies accelerated purchasing to prevent shortages and avoid higher prices related to the ongoing U.S.-Israel conflict with Iran.
Supply chain challenges intensified significantly, with the supplier deliveries measurement climbing to 60.6 from 58.9 the previous month. Readings above 50 indicate slower delivery times. These delays forced manufacturers to absorb higher costs, pushing the prices paid indicator up dramatically to 84.6 – the steepest level since April 2022 – compared to 78.3 in March. This surge reinforced economists’ predictions that inflation will continue accelerating throughout the year.
Government data released Thursday showed the U.S. personal consumption expenditures price index experienced its largest monthly gain in nearly four years during March, with annual PCE inflation posting its biggest increase since May 2023.
The Federal Reserve monitors the PCE price index as part of its 2% inflation goal. On Wednesday, the central bank maintained its key overnight interest rate between 3.50% and 3.75%, acknowledging mounting inflation concerns.
Financial markets anticipate the Fed will maintain current rates through 2027. Prior to the conflict, manufacturing faced challenges from President Donald Trump’s comprehensive import tariffs, which the U.S. Supreme Court overturned. The White House has implemented new duties, arguing tariffs are essential for revitalizing domestic industrial capacity.
While advance purchasing appears to be driving orders higher, backlogged orders continued declining last month, and export weakness persisted. Consequently, factory employment dropped for the 15th consecutive month. Manufacturing jobs have decreased by approximately 85,000 positions since January 2025.
