US Manufacturing Weakest In 2 Years As Construction Spending Plunges; Mfg Employment Lowest Since 2009

Tyler Durden's picture

April's Manufacturing PMI printed a minimally disappointing 54.1 (against 54.2 prior and expectations) - its lowest since January and hardly the post-weather Q2 surge everyone was hoping for. New Orders and Production were the weakest since December and export business fell for the first time in 5 months and input prices dropped for the 4th month in a row; all leading Markit to demand The Fed remain patient. ISM Manufacturing missed expectations and has not risen for 5 months (its longest streak since the recession) with a contraction in the employment index to lowest since Sept 2009. And then Construction Spending plunged 0.6% (against a +0.5% exp.) - the 7th miss in 10 months and worst April print since 2009.


Construction Spending was dismal...


... Growing at the lowest annual pace since the crisis, and just a fraction away from being the latest confirmation of a recession. One thing is certain: Q1 GDP will now be revised negative.

ISM Manufacturing remains at 2 year lows...


As employment collapses...

ISM Survey respondents:

  • "Low energy costs continue to help the bottom line." (Food, Beverage & Tobacco Products)
  • "Automotive industry is still very strong." (Fabricated Metal Products)
  • "Business holding relatively flat in North America, softening a bit globally." (Transportation Equipment)
  • "Foreign Exchange is reducing revenue, but volume has remained consistent." (Chemical Products)
  • "International shipments still being delayed by the strikes at ports on the West Coast." (Computer & Electronic Products)
  • "Production and orders remain strong and steady." (Primary Metals)
  • "Business conditions are good, with slowly rising demand for our products." (Miscellaneous Manufacturing)
  • "Labor, both skilled and unskilled, remains difficult to find qualified individuals." (Furniture & Related Products)
  • "Continuing to expedite shipments through Vancouver due to ongoing port delays." (Machinery)
  • "Customers perceive that raw materials prices have bottomed out so are now releasing orders." (Plastics & Rubber Products)

Uhm, did ISM forget it is no longer February when using the response template? The port strikes are over.

Not the post-Q1-weather bounce everyone was looking for.


Commenting on the final PMI data, Chris Williamson, Chief Economist at Markit said: 

“With manufacturing output growth slowing to the weakest seen so far this year and exports falling for the first time since November, the survey results raise worries that the dollar’s appreciation is hurting the economy.


“The slowing in the economy is accompanied by a renewed weakening of price pressures, linked to the exchange rate bringing down the cost of imports. Input prices showed one of the steepest falls seen since the recession, a cost-saving which producers often passed on to customers. Prices charged rose at the slowest rate seen for almost three years.


“The weakening growth trend and fall in price pressures add to a growing clutch of disappointing numbers which suggest the Fed will err on the side of caution and hold off from rate hikes until a clearer picture emerges of the economy’s health. Any policy tightening therefore looks likely to be deferred until at least September, but the fact that both manufacturing and services continue to grow at reasonably robust rates at the start of the second quarter suggest that rate hikes towards the end of the year should not be ruled out.”

*  *  *

It appears Markit is desparate not to be the only macro indicator flashing "all clear" as everything elese goes pear-shaped, and is preparing to converge with the Atlanta Fed in the coming weeks.

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papaswamp's picture

I blame the Tahitians!!!!

VinceFostersGhost's picture



Screw the Tahitians, we still have manufacturing?


That's some pretty big news!

NoDebt's picture

I'm glad none of this can affect the price of my stawks.

Temporalist's picture

The "picture" isn't "clear" after 7 years of "recovery" so you must continue to wait and be "patient" like the Fed until the "recovery" becomes more "clear" as the "recession" was in the past.

junction's picture

From the daily palnner of Valerie Jarrett: Nantucket summer house booked.  Freddie Gray murder investigation stalled as planned. Michelle O lunch program food vendors made their payments to stay in program.  Pelosi agrees to step down after passing  TPP.  Kill list approved.          

Cognitive Dissonance's picture

"...all leading Markit to demand The Fed remain patient."

Sounds like a killer liquidity addiction to me.

GMadScientist's picture

"Thou mayest yet rescue me from every temptation, even unto the end." - St. Goldie

buzzsaw99's picture

"Labor, both skilled and unskilled, remains difficult to find qualified individuals."...

i'll bet rampant unmitigated immigration could alleviate that problem. has anyone thought of that i wonder?

Osmium's picture

Not sure where they are looking.  We had two openings in the shipping department.  Had over 300 applications.

Of course, we did have to train them.  

buzzsaw99's picture

don't pay any attention to it. bill gates et al make sure that line is included in every market report for the past twenty years. it's bullshit designed to keep labor costs low so they can have MOAR.

Oldwood's picture

This all bullshit.

Obama tells us everything is GREAT!

You are all just a bunch of racists that just can't let an almost black president "create" his legacy!

Caveman93's picture

WTF!? You wasted money on training!? For shame! /sarc

Oldwood's picture

Besides all of the economic carnage that illegal immigration has rendered, as having spent my life in the construction industry, I can say it has gutted the skill level of what we might once have called "craftsmen". The surge of illegals has purged those who had worked for years to build their skill set and had progressed through the time honored apprenticeship process where skills were handed down over generations. Today we have people building structures that had virtually no experience. We see the result in the quality of today's construction. It is no surprise that a dominant theme in architecture is "old world" as that is the extent of their skill set. Rough textures, crappy finishes, miss-matched components. As with everything else, rather than addressing the base issues we find ourselves adjusting our perceptions of quality.

timeless21's picture

Did anyone hear about the new game with Britney Spears?

buzzsaw99's picture

the one from the Kim Kardashian game studio? no.

GMadScientist's picture

Unless it involves dunking her in a vat of fluoric acid, I'll pass.

SheepDog-One's picture

We're manufacturing less missiles and drones? Don't believe it.

buzzsaw99's picture

depleted uranium shipments are down 26%. the horror, the horror.

gwar5's picture

Everything is going to shit without another QE. Whocouldanode??  Whiskey Tango Foxtrot, Bitches!


Jonesy's picture

Just print more, not like it costs anything.

venturen's picture

Well the market will ramp on that!

nakki's picture

I always love the talk about businesses inability to find people who can do the job. I'm sure that all those Rosie the Riveters stepped right in and had the abilities and skills that allowed them to build a juggernaut of a war machine during WWII. In today's world, the US would have never entered the war as corporations would have just given up sighting that there were no skilled fabricators.

Caveman93's picture

Wait wait wait. I heard if you build it they will come. Is not true no?

iofera's picture
iofera (not verified) May 1, 2015 10:08 AM

It's pretty clear the world's going to hell in a hand basket, so get those gold coins together, hide in the woods and shake like a leaf until the dollar comes tumbling down.

Don't forget the Mountain House freeze dried foods!

MFL8240's picture

I guess this is transitiory too?

KansasCrude's picture

iofera  the NEW POSTER CHILD for an ignore button

Laddie's picture

Well Construction is now taken over by illegal aliens from Mexico, El Salvador, Guatemala etc. From Texas to old Virginia it is the same story, whether roofing or home construction all done by the non-Whites, and I've noticed as my local Wal-Mart has a mexican female as the manager the store has gotten WORSE and ALL the new hires are MEXICANS.

You see the trouble is whites don't want to work, they don't want IT jobs, construction, retail, teaching, they just don't want to work period, so thank goodness for these people of color. [That was sarcasm for the progressives reading]

walküre's picture

That ISM Employment chart over 15 years is saying it all. There's ebb and flow and expansion and contraction. We're coming off a high of expansion and naturally need to go into the valley of contraction. No QE4 until Q3 2014 if at all.

It could also just find equilibrium and stay stagnant for a while, no contraction and no expansion. The lack of growth pretty well confirms that. Possibly many more years of just muddling through on the horizon.

There's that 7 year itchy thingy though and it always showed up somehow. The Great Financial Crisis of 2008 just happened to be "right on time" to match the 7 year expansion since 2001..... 9/11 just happened to be "right on time" and 7 years after the expansion began in 1994... Maybe there's nothing to it at all. We will soon find out, stay tuned. Have popcorn ready for the spectacle when it happens! 3rd times the charm!

Mike Honcho's picture

They must have left out the Apple Watch from those manufacturing stats.

starman's picture

It was that god damn eathquake in Tibet! 

bid the soldiers shoot's picture


Today we see ism manufacturing lowest in 2 years


Biggest Inventory Build In History Prevents Total Collapse Of The US Economy

Lowest manufacturing in two years helps build the biggest inventory in history.

 What's a student of economy supposed to make of that?