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USA: factory dives in April but less than expected

The ISM manufacturing index fell to 41.5% from 49.1% in March.

Manufacturing activity in the United States plunged as planned in April, the fight against the pandemic requires, but contracted less than economists feared.

The ISM association’s purchasing managers’ index released on Friday fell to 41.5% from 49.1% in March. This is the lowest level since April 2009, during the last recession triggered by the financial crisis.

While manufacturing activity may well have bottomed out, Timothy Fiore, who is in charge of conducting the investigation, however stressed that as long as there is no vaccine, companies will have to put in place measures to prevent the spread of the new coronavirus which will necessarily have an impact on production.

Below the 50% mark, the index corresponds to a contraction in activity.

New orders suffered particularly in March, falling 15.1 percentage points from March to 27.1%.

It was the biggest drop since April 1951.

Production fell 20.2 percentage points to 27.5%, the lowest level since the survey was created in 1948.

The only sectors that posted growth in new orders were paper, food and beverage, and tobacco-related products.

“I think we have 4 to 6 weeks to go but not at the rate we saw in April,” said Fiore.

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