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US April Manufacturing Points to Slowdown

FILE - Insulin pens are produced at the factory of the U.S. pharmaceutical company Eli Lilly. Taken Oct. 12, 2015.

WASHINGTON - US manufacturing activity shrank again in April as companies continued to match slowing demand by cutting new orders, according to survey data released Monday.

The contraction registered by the Institute for Supply Management (ISM) was the fifth in a row, and will provide the US Federal Reserve with additional evidence of an economic slowdown as it begins its May meeting later in the week.

Despite the slowdown, the Fed is widely expected to hike its benchmark lending rate for a tenth - and possibly final - time on Wednesday as it looks to tackle above-target inflation by raising interest rates.

The ISM manufacturing survey rose slightly to 47.1 percent last month, up 0.8 percentage points from March. However, a reading below 50 percent indicates that US manufacturing is generally contracting.

The figure was 0.4 percentage points higher than the median expectations of analysts surveyed by MarketWatch.

"The April composite index reading reflects companies continuing to manage outputs to better match demand for the first half of 2023 and prepare for growth in the late summer/early fall period," Timothy Fiore, chair of the ISM's manufacturing business survey committee, said in a statement.

Fiore said demand continued to slow, with new orders and exports both registering a contraction last month.