U.S. Manufacturing Ticks Up in April, but Still in Contraction

U.S. manufacturing activity ticked up in April for the third straight month, although the overall industry still remains in contraction, according to a survey of purchasing managers released this morning.

If this sounds confusing, it goes like this: The Institute for Supply Management has an index of U.S. manufacturing activity that runs from zero to 100. Any number less than 50 indicates that the manufacturing sector is in contraction. Any number higher than 50 indicates the sector is expanding.

In April, the index number was 40.1, up from 36.3 in March. So the sector is still in contraction, but not as bad as it was in March.

The index number is computed by taking into account a number of factors, including inventory size, new orders and so forth.

The index hit its record low in December.

-- Frank Ahrens
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