US Manufacturing ISM down in April 2011

In April 2011, the ISM index for the US industry is down. Sub-index about price paid remains close to its historical record.

US Manufacturing ISM down in April 2011
In April 2011, the Manufacturing ISM index declined slightly to 60.4 points (-0.4 pt), less than expected (59.5 pts). The main survey for the US industry remained above 50 points (under 50 pts: activity contracting; above 50 points; activity expanding) for the 21th consecutive month.

All main sub-components are down (new orders, exports orders, production and employment). The index for price is stable and close to its historical highs.

This report underlines that the industrial activity in the US is still strong in early spring. However, leading components (new orders and new orders minus inventory) are down and it seems now pretty clear that the ISM index will be on a downward trend on the short-run.

The Price Index is still pointing toward strong cost pressures in the American industry (as everywhere). The report note that “rapidly rising raw material costs putting extreme pressure on profits” and that some suppliers “are attempting to increase prices on orders”. Moreover, “pressure from offshore suppliers continues to mount with exchange rate increases and seasonal demand for capacity”.

Market Impacts
Forex: After the publication, the USD depreciates (EUR/USD moving up above 1,145; GBP/USD rising close to 1,670).
Commodities: gold is up and back just under 1560 $/oz. WTI oil price is stable above 114 $/b just after publication.


Monday, May 2nd 2011

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World Economic Snapshot
CB 0.25% 1.50% 6.56% 0.1% 0.5% 1% 0.25% 12.25%
GDP 2.3% 2.5% 9.8% 2.5% 1.8% 2.9% 2.4% 4.2%
Price 3.6% 2.7% 5.5% 0.3% 4.5% 3.3% 0.3% 6.1%
UR 9.2% 9.9% - 4.7% 7.7% 7.4% 3.0% 6.0%

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