ISM Manufacturing Index - May 4, 2009

Weekly Market Insight

The Institute for Supply Management reported on Friday that the nation’s manufacturing sector contracted in April for a 15th consecutive month, but parts of the report indicated that the contraction was moderating. The April reading of 40.1, though still well below the equilibrium level of 50, was the fourth consecutive month of improvement. New orders increased six points to 47.2, while inventories remained near their lowest levels since the early 1980s. Rising new orders and depleted inventories suggest that production is likely to increase in the next few quarters. The manufacturing contraction is reflected in the industrial property market where the first quarter vacancy rate increased by 70 basis points to 9.5 percent, the sharpest rate of increase in the 22-year history of the Grubb & Ellis survey. While the worst of the manufacturing contraction seems to have passed, the recovery is likely to be sluggish, particularly in the Midwest where the automobile industry continues to restructure.
Source: Institute for Supply Management, Grubb & Ellis.

Robert Bach, Senior Vice President, Chief Economist, has 30 years of professional experience in real estate market research, consulting and city planning. His commentary on the real estate markets is provided here on a weekly basis.
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