ISM Reports Growth in March, Concern Over Pricing
Economic activity in the manufacturing sector expanded in March for the 20th consecutive month, and the overall economy grew for the 22nd consecutive month, say the nation's supply executives in the latest Manufacturing Report On Business from the Institute for Supply Management, Tempe, Ariz.
Manufacturing continued its rapid growth in March as the PMI registered 61.2 percent, though that was a decrease of 0.2 percentage point when compared to February's reading of 61.4 percent. A reading above 50 percent indicates the manufacturing economy is expanding.
“The recent trend of rapid growth in the manufacturing sector continued in March, as the PMI registered above 60 percent for the third consecutive month,” says Norbert J. Ore, chairman of ISM’s Manufacturing Business Survey Committee. “While manufacturers are benefiting from strength in new orders and production, there is significant concern with regard to commodity prices. Many manufacturers indicate the prices they have to pay for inputs are rising, and there is concern about the impact of higher prices on their margins.”
Of the 18 manufacturing industries surveyed, 15 reported growth in March, including fabricated metal products and miscellaneous manufacturing. Among the industries reporting contraction were primary metals.
ISM's New Orders Index registered 63.3 percent in March, a decrease of 4.7 percentage points when compared to the 68 percent reported in February. This is the 21st consecutive month of growth in the New Orders Index. A New Orders Index above 52.1 percent, over time, is generally consistent with an increase in the Census Bureau's series on manufacturing orders.
The Production Index registered 69 percent in March, an increase of 2.7 percentage points from the February reading of 66.3 percent. An index above 51 percent, over time, is generally consistent with an increase in the Federal Reserve Board's Industrial Production figures. This is the 22nd consecutive month the Production Index has registered above 50 percent.
ISM's Employment Index registered 63 percent in March, which is 1.5 percentage points lower than the 64.5 percent reported in February. This is the 18th consecutive month of growth in manufacturing employment. An Employment Index above 50.1 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics data on manufacturing employment.