FOR RELEASE: May 1, 2007

Contact:	Rose Marie Goupil
	ISM, Media Relations
	Tempe, Arizona
	800/888-6276, Ext. 3015
	E-mail: rgoupil@ism.ws

PMI at 54.7%

DO NOT CONFUSE THIS NATIONAL REPORT with the various regional purchasing reports released across the country. The national report's information reflects the entire United States, while the regional reports contain primarily regional data from their local vicinities. Also, the information in the regional reports is not used in calculating the results of the national report. The information compiled in this report is for the month of April 2007.

New Orders, Production and Employment Growing
Inventories Contracting
Deliveries Slowing

(Tempe, Arizona) — Economic activity in the manufacturing sector expanded in April for the third consecutive month, while the overall economy grew for the 66th consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business®.

The report was issued today by Norbert J. Ore, C.P.M., chair of the Institute for Supply Management™ Manufacturing Business Survey Committee. "Manufacturing activity increased in April as the PMI reflects accelerating growth for the month. New Orders and Production improved significantly as did Employment. Manufacturers are now in their ninth month of inventory reduction, so supply chains are generally in balance. On the negative side, prices continue to rise at a rapid rate with metals and energy being the areas of greatest concern to buyers."

TOP PERFORMING INDUSTRIES

The 11 industries reporting growth in April — listed in order — are: Wood Products; Apparel, Leather & Allied Products; Food, Beverage & Tobacco Products; Miscellaneous Manufacturing; Machinery; Chemical Products; Transportation Equipment; Computer & Electronic Products; Plastics & Rubber Products; Fabricated Metal Products; and Furniture & Related Products.

WHAT RESPONDENTS ARE SAYING ...

• "The economy seems strong, business is good here." (Fabricated Metal Products)
• "Detecting contractor manpower shortages." (Chemical Products)
• "High corn prices could have long-term impact on soft drink industry." (Food, Beverage & Tobacco Products)
• "First quarter business was strong despite gloomy 2006 forecasts for the 2007 diesel engine industry." (Machinery)
• "Business remains at or above budget in all markets." (Primary Metals)

MANUFACTURING AT A GLANCE APRIL 2007
Index	Series Index April	Series Index March	Percentage Point Change	Direction	Rate of Change	Trend* (Months)
PMI	54.7	50.9	+3.8	Growing	Faster	3
New Orders	58.5	51.6	+6.9	Growing	Faster	5
Production	57.3	53.0	+4.3	Growing	Faster	3
Employment	53.1	48.7	+4.4	Growing	From Contracting	1
Supplier Deliveries	50.2	51.3	-1.1	Slowing	Slower	46
Inventories	46.3	47.5	-1.2	Contracting	Faster	9
Customers' Inventories	47.0	48.0	-1.0	Too Low	Faster	2
Prices	73.0	65.5	+7.5	Increasing	Faster	4
Backlog of Orders	54.5	47.0	+7.5	Growing	From Contracting	1
Exports	57.0	55.5	+1.5	Growing	Faster	53
Imports	58.0	57.5	+0.5	Growing	Faster	64
OVERALL ECONOMY				Growing	Faster	66
Manufacturing Sector				Growing	Faster	3

*Number of months moving in current direction

COMMODITIES REPORTED UP/DOWN IN PRICE and IN SHORT SUPPLY

Commodities Up in Price

Aluminum (5); Caustic Soda; Chemicals; Cobalt; Copper (2); Copper Based Products; Corn (2); Corn Based Products; Corrugated Containers (2); Diesel Fuel (2); Fuel (2); Gasoline; Natural Gas (3); Natural Rubber; Nickel (6); Soybean Oil; Stainless Steel (4); Steel (2); Steel — Structural; and Titanium — Plate.

Commodities Down in Price

No commodities are reported down in price.

Commodities in Short Supply

No commodities are reported in short supply.

Note: The number of consecutive months the commodity is listed is indicated after each item.

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APRIL 2007 MANUFACTURING INDEX SUMMARIES

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PMI

Manufacturing growth accelerated in April as the PMI registered 54.7 percent, an increase of 3.8 percentage points when compared to March's reading of 50.9 percent. A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.

A PMI in excess of 41.9 percent, over a period of time, generally indicates an expansion of the overall economy. Therefore, the PMI indicates that both the overall economy and the manufacturing sector are growing. "The past relationship between the PMI and the overall economy indicates that the PMI average for January through April (51.8 percent) corresponds to a 3.1 percent increase in real gross domestic product (GDP) annually. In addition, if the PMI for April (54.7) is annualized, it corresponds to a 4 percent increase in real GDP annually."

THE LAST 12 MONTHS

Month	PMI		Month	PMI
Apr 2007	54.7		Oct 2006	51.5
Mar 2007	50.9		Sep 2006	52.7
Feb 2007	52.3		Aug 2006	54.3
Jan 2007	49.3		Jul 2006	54.4
Dec 2006	51.4		Jun 2006	54.0
Nov 2006	49.9		May 2006	54.7
Average for 12 months – 52.5 High – 54.7 Low – 49.3

New Orders

ISM's New Orders Index surged to 58.5 percent in April. The index is 6.9 percentage points higher than the 51.6 percent reported in March. A New Orders Index above 49.1 percent, over time, is generally consistent with an increase in the Census Bureau's series on manufacturing orders (in constant 2000 dollars). Eleven industries reported increases during April: Wood Products; Miscellaneous Manufacturing; Food, Beverage & Tobacco Products; Apparel, Leather & Allied Products; Machinery; Plastics & Rubber Products; Transportation Equipment; Chemical Products; Fabricated Metal Products; Computer & Electronic Products; and Paper Products.

New Orders	% Better	% Same	% Worse	Net	Index
Apr 2007	40	45	15	+25	58.5
Mar 2007	30	51	19	+11	51.6
Feb 2007	36	43	21	+15	54.9
Jan 2007	27	45	28	-1	50.3

Production

ISM's Production Index registered 57.3 percent in April, 4.3 percentage points higher than the 53 percent reported in March. April is the third consecutive month of production growth for manufacturers. An index above 49.8 percent, over time, is generally consistent with an increase in the Federal Reserve Board's Industrial Production figures. Of the industries reporting in April, 11 registered growth: Wood Products; Food, Beverage & Tobacco Products; Apparel, Leather & Allied Products; Miscellaneous Manufacturing; Nonmetallic Mineral Products; Chemical Products; Transportation Equipment; Machinery; Fabricated Metal Products; Furniture & Related Products; and Computer & Electronic Products.

Production	% Better	% Same	% Worse	Net	Index
Apr 2007	35	52	13	+22	57.3
Mar 2007	29	53	18	+11	53.0
Feb 2007	28	54	18	+10	54.1
Jan 2007	22	53	25	-3	49.6

Employment

ISM's Employment Index registered 53.1 percent in April, which is an increase of 4.4 percentage points when compared to March's reading of 48.7 percent. An Employment Index above 49.2 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) data on manufacturing employment. The eight industries reporting growth in employment during April are: Wood Products; Apparel, Leather & Allied Products; Food, Beverage & Tobacco Products; Computer & Electronic Products; Chemical Products; Plastics & Rubber Products; Machinery; and Transportation Equipment.

Employment	% Higher	% Same	% Lower	Net	Index
Apr 2007	23	64	13	+10	53.1
Mar 2007	14	72	14	0	48.7
Feb 2007	21	62	17	+4	51.1
Jan 2007	14	68	18	-4	49.5

Supplier Deliveries

The delivery performance of suppliers to manufacturing organizations was slower for the 46th consecutive month in April. ISM's Supplier Deliveries Index registered 50.2 percent in April, a decrease of 1.1 percentage points when compared to March's reading of 51.3 percent. A reading above 50 percent indicates slower deliveries. The four industries reporting slower supplier deliveries in April are: Primary Metals; Computer & Electronic Products; Transportation Equipment; and Chemical Products.

Supplier Deliveries	% Slower	% Same	% Faster	Net	Index
Apr 2007	7	87	6	+1	50.2
Mar 2007	5	93	2	+3	51.3
Feb 2007	7	87	6	+1	50.8
Jan 2007	7	88	5	+2	52.7

Inventories

Manufacturers' inventories registered 46.3 percent in April, a 1.2 percentage point decrease when compared to March's reading of 47.5 percent. This is the ninth consecutive month of inventory liquidation. An Inventories Index greater than 42.4 percent, over time, is generally consistent with expansion in the Bureau of Economic Analysis' (BEA) figures on overall manufacturing inventories (in chained 2000 dollars). The six industries reporting higher inventories in April are: Apparel, Leather & Allied Products; Computer & Electronic Products; Printing & Related Support Activities; Primary Metals; Paper Products; and Fabricated Metal Products.

Inventories	% Higher	% Same	% Lower	Net	Index
Apr 2007	16	62	22	-6	46.3
Mar 2007	17	64	19	-2	47.5
Feb 2007	16	62	22	-6	44.6
Jan 2007	12	57	31	-19	39.9

Customers' Inventories*

The ISM Customers' Inventories Index registered 47 percent in April, 1 percentage point lower than the 48 percent reported in March. The index indicates that respondents believe their customers have less than sufficient inventories on hand (inventories are too low) at this time. This is the second consecutive month in which manufacturers have reported their customers' inventories to be too low, following five consecutive months that the index registered above 50 percent. Three industries reported higher customers' inventories during April: Plastics & Rubber Products; Fabricated Metal Products; and Machinery.

Customers' Inventories	% Reporting	%Too High	%About Right	%Too Low	Net	Index
Apr 2007	77	13	68	19	-6	47.0
Mar 2007	75	11	74	15	-4	48.0
Feb 2007	74	17	72	11	+6	53.0
Jan 2007	75	19	66	15	+4	52.0

Prices*

In April, the ISM Prices Index registered 73 percent, indicating manufacturers are paying higher prices on average when compared to March. While 50 percent of respondents reported paying higher prices and 4 percent reported paying lower prices, 46 percent of supply executives reported paying the same prices as the preceding month. A Prices Index above 47.2 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) Index of Manufacturers Prices. In April, 13 industries reported paying higher prices: Plastics & Rubber Products; Fabricated Metal Products; Wood Products; Paper Products; Electrical Equipment, Appliances & Components; Miscellaneous Manufacturing; Transportation Equipment; Chemical Products; Food, Beverage & Tobacco Products; Machinery; Textile Mills; Primary Metals; and Computer & Electronic Products.

Prices	% Higher	% Same	% Lower	Net	Index
Apr 2007	50	46	4	+46	73.0
Mar 2007	36	59	5	+31	65.5
Feb 2007	32	54	14	+18	59.0
Jan 2007	24	58	18	+6	53.0

Backlog of Orders*

ISM's Backlog of Orders Index registered 54.5 percent in April, 7.5 percentage points higher than the 47 percent reported in March. Of the 85 percent of respondents who reported their backlog of orders, 26 percent reported greater backlogs, 17 percent reported smaller backlogs, and 57 percent reported no change from March. The nine industries reporting an increase in order backlogs in April are: Wood Products; Apparel, Leather & Allied Products; Paper Products; Electrical Equipment, Appliances & Components; Miscellaneous Manufacturing; Chemical Products; Computer & Electronic Products; Transportation Equipment; and Machinery.

Backlog of Orders	% Reporting	% Greater	% Same	% Less	Net	Index
Apr 2007	85	26	57	17	+9	54.5
Mar 2007	89	20	54	26	-6	47.0
Feb 2007	85	26	51	23	+3	51.5
Jan 2007	87	17	53	30	-13	43.5

New Export Orders*

ISM's New Export Orders Index registered 57 percent in April, an increase of 1.5 percentage points when compared to March's index of 55.5 percent. This is the 53rd consecutive month of growth in export orders. The seven industries reporting growth in new export orders in April are: Nonmetallic Mineral Products; Apparel, Leather & Allied Products; Computer & Electronic Products; Miscellaneous Manufacturing; Chemical Products; Machinery; and Transportation Equipment.

New Export Orders	% Reporting	% Higher	% Same	% Lower	Net	Index
Apr 2007	82	20	74	6	+14	57.0
Mar 2007	77	18	75	7	+11	55.5
Feb 2007	78	19	70	11	+8	54.0
Jan 2007	79	15	75	10	+5	52.5

Imports*

Imports of materials by manufacturers grew during April as the Imports Index registered 58 percent, an increase of 0.5 percentage point when compared to March. This is the 64th consecutive month of growth in import orders. The eight industries reporting growth in import activity for April are: Nonmetallic Mineral Products; Food, Beverage & Tobacco Products; Chemical Products; Furniture & Related Products; Fabricated Metal Products; Plastics & Rubber Products; Machinery; and Miscellaneous Manufacturing.

Imports	% Reporting	% Higher	% Same	% Lower	Net	Index
Apr 2007	84	23	70	7	+16	58.0
Mar 2007	82	24	67	9	+15	57.5
Feb 2007	78	29	65	6	+23	61.5
Jan 2007	84	18	73	9	+9	54.5

* The Backlog of Orders, Prices, Customers' Inventories, Imports and New Export Orders Indexes do not meet the accepted criteria for seasonal adjustments.

Buying Policy

Average commitment leadtime for Capital Expenditures increased 5 days to 115 days. Average leadtime for Production Materials increased 1 day to 46 days. Average leadtime for Maintenance, Repair and Operating (MRO) Supplies increased 3 days to 25 days.

Percent Reporting
Capital Expenditures	Hand- to- Mouth	30 Days	60 Days	90 Days	6 Months	1 Year+	Average Days
Apr 2007	21	9	12	24	22	12	115
Mar 2007	19	10	17	22	22	10	110
Feb 2007	15	11	17	22	25	10	115
Jan 2007	21	10	16	21	22	10	108
Production Materials	Hand- to- Mouth	30 Days	60 Days	90 Days	6 Months	1 Year+	Average Days
Apr 2007	18	45	25	8	3	1	46
Mar 2007	21	35	29	12	3	0	45
Feb 2007	21	36	29	9	4	1	48
Jan 2007	19	39	26	10	5	1	50
MRO Supplies	Hand- to- Mouth	30 Days	60 Days	90 Days	6 Months	1 Year+	Average Days
Apr 2007	52	33	11	3	0	1	25
Mar 2007	52	34	10	4	0	0	22
Feb 2007	49	34	13	4	0	0	24
Jan 2007	49	36	12	3	0	0	23

About this Report

The data presented herein is obtained from a survey of manufacturing supply managers based on information they have collected within their respective organizations. ISM makes no representation, other than that stated within this release, regarding the individual company data collection procedures. Use of the data is in the public domain and should be compared to all other economic data sources when used in decision-making.

Data and Method of Presentation

The Manufacturing ISM Report On Business® is based on data compiled from purchasing and supply executives nationwide. Membership of the Manufacturing Business Survey Committee is diversified by NAICS, based on each industry's contribution to gross domestic product (GDP). Manufacturing Business Survey Committee responses are divided into the following NAICS code categories: Food, Beverage & Tobacco Products; Textile Mills; Apparel, Leather & Allied Products; Wood Products; Paper Products; Printing & Related Support Activities; Petroleum & Coal Products; Chemical Products; Plastics & Rubber Products; Nonmetallic Mineral Products; Primary Metals; Fabricated Metal Products; Machinery; Computer & Electronic Products; Electrical Equipment, Appliances & Components; Transportation Equipment; Furniture & Related Products; and Miscellaneous Manufacturing (products such as medical equipment and supplies, jewelry, sporting goods, toys and office supplies).

Survey responses reflect the change, if any, in the current month compared to the previous month. For each of the indicators measured (New Orders, Backlog of Orders, New Export Orders, Imports, Production, Supplier Deliveries, Inventories, Customers' Inventories, Employment and Prices), this report shows the percentage reporting each response, the net difference between the number of responses in the positive economic direction (higher, better and slower for Supplier Deliveries) and the negative economic direction (lower, worse and faster for Supplier Deliveries), and the diffusion index. Responses are raw data and are never changed. The diffusion index includes the percent of positive responses plus one-half of those responding the same (considered positive).

The resulting single index number for those meeting the criteria for seasonal adjustments (PMI, New Orders, Production, Employment, Supplier Deliveries and Inventories) is then seasonally adjusted to allow for the effects of repetitive intra-year variations resulting primarily from normal differences in weather conditions, various institutional arrangements, and differences attributable to non-moveable holidays. All seasonal adjustment factors are supplied by the U.S. Department of Commerce and are subject annually to relatively minor changes when conditions warrant them. The PMI is a composite index based on the seasonally adjusted diffusion indexes for five of the indicators with varying weights: New Orders — 30%; Production — 25%; Employment — 20%; Supplier Deliveries — 15%; and Inventories — 10%.

Diffusion indexes have the properties of leading indicators and are convenient summary measures showing the prevailing direction of change and the scope of change. A PMI reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally declining. A PMI in excess of 41.9 percent, over a period of time, indicates that the overall economy, or gross domestic product (GDP), is generally expanding; below 41.9 percent, it is generally declining. The distance from 50 percent or 41.9 percent is indicative of the strength of the expansion or decline. With some of the indicators within this report, ISM has indicated the departure point between expansion and decline of comparable government series, as determined by regression analysis.

Responses to Buying Policy reflect the percent reporting the current month's leadtime, the approximate weighted number of days ahead for which commitments are made for Production Materials; Capital Expenditures; and Maintenance, Repair and Operating (MRO) Supplies, expressed as hand-to-mouth (five days), 30 days, 60 days, 90 days, six months (180 days), a year or more (360 days), and the weighted average number of days. These responses are raw data, never revised, and not seasonally adjusted since there is no significant seasonal pattern.

The Manufacturing ISM Report On Business® is published monthly by the Institute for Supply Management™. The Institute for Supply Management™, established in 1915, is the largest supply management organization in the world as well as one of the most respected. ISM's mission is to lead the supply management profession through its standards of excellence, research, promotional activities and education. This report has been issued by the association since 1931, except for a four-year interruption during World War II.

The full text version of the Manufacturing ISM Report On Business® is posted on ISM's Web site at www.ism.ws on the first business day of every month after 10:10 a.m. (ET).

The next Manufacturing ISM Report On Business® featuring the May 2007 data will be released at 10:00 a.m. (ET) on Friday, June 1, 2007.

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