Growth in U.S. manufacturing activity unexpectedly slowed in the month of April, according to a report released by the Institute for Supply Management on Monday.
The ISM said its manufacturing PMI slid to 60.7 in April after jumping to a more than 37-year high of 64.7 in March.
While a reading above 50 still indicates growth in manufacturing activity, economists had expected the index to inch up to 65.0.
“Worker absenteeism, short-term shutdowns due to part shortages, and difficulties in filling open positions continue to be issues that limit manufacturing-growth potential,” said Timothy R. Fiore, chair of the ISM Manufacturing Business Survey Committee.
The unexpected pullback by the headline index came as the production index tumbled to 62.5 in April from 68.1 in March and the new orders index fell to 64.3 from 68.0.
The employment index also slumped to 55.1 in April from 59.6 in March, indicating a slowdown in the pace of job growth in the manufacturing sector.
Meanwhile, the report showed the prices index jumped to 89.6 in April from 85.6 in March, reaching its highest level since July of 2008.
“Aluminium, copper, chemicals, all varieties of steel, plastics, transportation costs, wood and lumber products all continued to experience price increases as a result of product scarcity,” said Fiore.
On Wednesday, the ISM is scheduled to release a separate report on activity in the service sector in the month of April. The ISM’s services PMI is expected to inch up to 64.3 in April from 63.7 in March.