WASHINGTON, May 1 (Reuters) - U.S. manufacturing activity held steady in April, but supplier delivery performance worsened as the Middle East conflict disrupted shipping in the Strait of Hormuz, boosting prices for raw materials and other inputs to a four-year high.

The Institute for Supply Management said on Friday its manufacturing PMI was unchanged at near a four-year high of 52.7 last month. The PMI remained above the 50 level, which indicates expansion in the manufacturing sector, for a fourth straight month.

Economists polled by Reuters had forecast the PMI rising to 53. The PMI was anchored by an increase in new orders, likely as businesses rushed to place orders to avoid shortages and higher prices stemming from the U.S.-Israel war with Iran. The new orders measure rose to 54.1 from 53.5 in March.

The survey's supplier deliveries index jumped to 60.6 from 58.9 in March. A reading above 50 indicates slower deliveries. That led to manufacturers paying more for inputs. The survey's prices paid measure surged to 84.6, the highest reading since April 2022, from 78.3 in March. The rise reinforced economists' expectations that inflation would accelerate further this year.

The U.S. personal consumption expenditures price index rose by the most in nearly four years in March, the government reported on Thursday, with the annual increase in PCE inflation the biggest since May 2023. 

The PCE price index is one of the measures tracked by the Federal Reserve for its 2% inflation target. The U.S. central bank on Wednesday left its benchmark overnight interest rate in the 3.50%-3.75% range, noting growing inflation worries.

Financial markets expect the Fed will keep rates unchanged into 2027. Before the war, manufacturing was slammed by President Donald Trump's sweeping tariffs on imports, which were struck down by the U.S. Supreme Court. New duties have been put in place by the White House, which has argued that tariffs were necessary to rejuvenate the domestic industrial base.

With preemptive buying likely driving orders, unfilled orders slowed further last month, while the downturn in exports persisted. As a result, factory employment fell for a 15th straight month. Manufacturing employment has declined by about 85,000 jobs since January 2025.