April ISM Falls, Prices Paid At Highest Since July 2008, "No Commodities Down In Price"

Tyler Durden's picture

The April ISM is out, and while it confirms last week's declining Chicago PMI data and the fact that the Japanese contraction has not even remotely impacted US businesses yet (and it will), the recent weakness predicted by various Fed diffusion indices is being confirmed. The ISM came at 60.4, a decline from 61.2 in March, primarily a a result of a fall in Production (-5.2), New Orders (-1.6) Supplier Deliveries (2.9) and Imports (-1.0). All of these metrics will drop far more once the Japanese contraction is truly appreciated. On the other hand, inventory restocking is still working its artificial growth miracles, rising by 6.2 to 53.6. Yet the most important metric as always remains the Price Paid, which after rising once again from 85.0 to 85.5, above expectations, is at the highest since July 2008. Then again, by now our thesis of (more than) transitory inflation can be appreciate by everyone.

ISM historical:

Index summary:

Survey respondents"

  • "Rapidly rising raw material costs putting extreme pressure on profits." (Food, Beverage & Tobacco Products)
  • "Plastic resin product prices are climbing so fast that [suppliers]
    are attempting to increase prices on orders already accepted but not
    [yet] delivered." (Chemical Products)
  • "Customers are rebuilding safety stock levels of inventory, and
    also trying to buy ahead of material price increases." (Plastics &
    Rubber Products)
  • "Market continues to get stronger month over month. Recovery is faster than anticipated." (Transportation Equipment)
  • "Pressure from offshore suppliers continues to mount with exchange
    rate increases and seasonal demand for capacity." (Miscellaneous
    Manufacturing)

And a listing of commodities up (and down lol) in price as well as in short supply"

COMMODITIES REPORTED UP/DOWN IN PRICE and IN SHORT SUPPLY

Commodities Up in Price

Aluminum (8); Aluminum Products (4); Brass (5); Caustic Soda (2); Chemicals (2); Cocoa/Cocoa Powder (3); Copper (9); Copper Based Products (6); Copper Wire; Corn (8); Diesel (5); Electric/Electronic Components (2); Fuel Oils (4); Fuel Surcharges (2); High Density Polyethylene (2); LDPE; Natural Gas; Oils and Lubrication; PET (2); Plastics (4); Plastic Products (4); Plastic Resins (6); Poly Bags; Polyethylene (3); Polyethylene Resin (4); Polypropylene (4); Resins (2); Resin Based Products (2); Rubber (2); Rubber Products (3); Silver (2); Solvents; Stainless Steel (6); Steel (8); Steel — Cold Rolled; Steel — Galvanized; Steel Products (5); Titanium Dioxide; and Transportation Rates (2).

Commodities Down in Price

No commodities are reported down in price.

Commodities in Short Supply

Capacitors; Electric/Electronic Components (4); Nuts — Food; and Titanium Dioxide (2).