Factory activity in the United States last month dropped to its lowest level since July 2020 as supply chain snarls intensified amid a new wave of pandemic-related lockdowns in China, an industry survey said on Monday.
The Institute for Supply Management said its manufacturing index dropped almost 2 percentage points to 55.4 percent in April, against expectations for a modest increase, but still above the 50-percent threshold indicating expansion.
The culprit was a renewed flareup in the supply chain woes that have dogged American factories throughout their recovery from the Covid-19 downturn, and in particular, China’s aggressive moves to stop renewed outbreaks in Beijing, Shanghai and other major cities.
“Overseas partners are experiencing Covid-19 impacts, creating a near-term headwind for the US manufacturing community,” said Timothy Fiore, the survey’s chairman. “Fifteen percent of panelists’ general comments expressed concern about their Asian partners’ ability to deliver reliably in the summer months, up from 5 percent in March,” he added.