April 2, 2014
PMI Expands Again in March
Economic activity in the manufacturing sector expanded in March for the 10th consecutive month. The PMI for March was 53.7 percent, 0.5 percentage point better than February, according to the latest Manufacturing Report on Business from the Tempe, Ariz.-based Institute for Supply Management. A reading above 50 indicates growth.
Of the 18 manufacturing industries surveyed, 14 reported growth in March, including fabricated metal products, primary metals and machinery. Among the four industries reporting contraction was miscellaneous manufacturing.
"The PMI for January and February of 52.7 percent corresponds to a 3.1 percent increase in real gross domestic product on an annualized basis," says Bradley Holcomb, chairman of ISM's Manufacturing Business Survey Committee. "If the PMI for March is annualized, it corresponds to a 3.5 percent increase in real GDP annually."
The New Orders Index registered 55.1 percent, an increase of 0.6 percentage point from February's reading of 54.5 percent. The Production Index registered 55.9 percent, a substantial increase of 7.7 percentage points compared to February's reading of 48.2 percent.
Employment grew for the ninth consecutive month, but at a slower rate by 1.2 percentage points, registering 51.1 percent compared to February's reading of 52.3 percent. The Inventories Index registered 52.5 percent in March, the same reading as reported in February, and indicates that inventories are growing for the second consecutive month, following two consecutive months of contraction.