COVID-19 Hits the April PMI Index Hard
The Institute for Supply Management® reported a massive PMI index drop to 41.5 percent for April for US manufacturers. That follows 49.1 percent from March and certainly reflects the broad shutdown across the US.
“The coronavirus pandemic and global energy market weakness continue to impact all manufacturing sectors for the second straight month. Among the six big industry sectors, Food, Beverage & Tobacco Products remains the strongest. Transportation Equipment and Fabricated Metal Products are the weakest of the big six sectors,” says Timothy R. Fiore, Chair for the ISM® Manufacturing Business Survey Committee.
Of the 18 manufacturing industries, two reported growth in April — Paper Products; and Food, Beverage and Tobacco Products.
The 15 industries reporting contraction for April — Printing and Related Support Activities; Furniture and Related Products; Transportation Equipment; Textile Mills; Fabricated Metal Products; Nonmetallic Mineral Products; Machinery; Plastics and Rubber Products; Electrical Equipment, Appliances and Components; Petroleum and Coal Products; Wood Products; Miscellaneous Manufacturing; Computer and Electronic Products; Primary Metals; and Chemical Products.
EUROPEAN PMI
Following that trend, the European manufacturing PMI numbers fell massively with the Euro Area index falling to 33.4 percent, which represented the largest month of contraction for the index which started in June of 1997.
After showing some resilience in March with a 45.4 percent index, Germany’s PMI fell to 34.5 percent for April.
Italy was hit even harder as the 31.1 PMI number also represented the lowest number in the history of the series.
CHINA SLIPS IN APRIL
China saw a strong recovery in the Caixin Manufacturing PMI in March with a 50.1 reading after February’s record low of 40.3. However, the global impact of the COVID-19 saw China’s April number slip into contraction territory at 49.4 with previous estimates expecting a 50.3 number. New export numbers for China had their steepest decline dating back December of 2008, while new orders also have now fallen for three straight months.
ISM® PANEL COMMENTS
“Production stopped, other than to make hand sanitizer for those in need.” (Chemical Products)
“COVID-19 has created a wave of activities, including vendors closing, vendors focusing only on the medical industry, employees not coming to work, delayed shipments from overseas, [and] etcetera.” (Transportation Equipment)
“The food processing B2B space remains steady. We are weathering the storm. There is a fortunate increased need for packaged foods. Softening is showing through in some products that find their way into food service and lodging.” (Food, Beverage & Tobacco Products)
“Our refinery is losing money making gasoline due to the falling demand.” (Petroleum & Coal Products)
“We supply the construction industry in various ways, where the slowdown has been a bit slower than most industries. It is, however; beginning to impact our business, and we see more challenges on the horizon.” (Fabricated Metal Products)
“Our packaging business is starting to see signs of a slowdown in May after two strong months into COVID-19.” (Paper Products)
