Manufacturing PMI Climbs Amid Middle East Disruptions
The S&P Global Manufacturing PMI was 54.5 in April, up from the March reading of 52.3. New orders grew at the fastest pace in four years in April, but exports declined for the 11th consecutive month as tariffs and the conflict in the Middle East drove up costs and hindered foreign demand. Meanwhile, input and selling prices increased at faster paces as input and output cost inflation both hit 10-month highs. The conflict in the Middle East had a notable impact on new orders in April, with companies purchasing now to avoid price increases and supply shortages before they become more widespread.
Production rose during the month, and despite an uptick in sales, stocks of finished goods grew for the first time in three months. Employment declined for the first time in nine months as higher raw material costs have started influencing hiring decisions. Meanwhile, delivery times continued to lengthen, a result of the conflict in the Middle East causing widespread material shortages.
Expectations that the impact of the conflict in the Middle East will be less than previously forecasted drove business confidence to its highest level since February 2025. Furthermore, firms have a positive outlook for production, partly attributable to the large gains in new orders in April.