US manufacturing activity expands in April, despite forecasts

​​​​​​​By Mucahithan Avcioglu

ISTANBUL (AA) - The US manufacturing sector expanded in April, despite estimates of a downturn, according to flash estimates by S&P Global on Wednesday.

The S&P's Purchasing Managers' Index (PMI) rose to 50.7 points, up 0.5 points from March's 50.2.

Markets expected the figure to contract to 49 points. A reading above 50 indicates growth, while below that figure signals contraction.

"Whilst new orders placed at factories rose at a slightly increased rate, linked to higher domestic orders, the increase was only modest and curbed by a marked fall in export orders. While tariffs had in some instances reportedly helped drive new sales to domestic customers, trade policy was widely linked to falling foreign sales," it said.

Employment increased marginally, for the fourth time in five months, but at a slower pace than in March, and with a far lower rate of hiring compared to the 31-month high seen at the start of the year.

Prices for goods and services increased at the fastest rate in 13 months. Manufacturing saw a 29-month high rate of inflation, while services continued to rise.

"Higher charges were attributed to rising costs, linked widely in turn to tariffs, rising import prices, and increased labor costs," it said. "Input costs in the manufacturing sector rose at a pace not seen since August 2022, as suppliers pushed through price hikes linked to tariffs, supply concerns and a weakened exchange rate.”

Meanwhile, the services sector PMI fell 3 points to 51.4 in April from 54.4 in March.

The composite PMI, which includes manufacturing and services sectors, also decreased 2.3 points on a monthly basis to 51.2.

The index, which recorded its lowest in 16 months, was 53.5 in March.