The latest Institute for Supply Management (ISM) manufacturing index hit 57.2 in March, versus consensus estimates of around 57, continuing a long stretch of expansion in the key sector. The measure showed manufacturing activity increased for the 94th straight month overall. Any reading above 50 demonstrates likely growth.
While the index was down slightly from the 57.7 mark reported for February, 17 of the 18 manufacturing industries included in the survey grew in March. Segments like plastics and rubber products, electrical equipment, appliances and components, and printing all saw gains. Meanwhile, other measures brought varying results. The new orders index, for example, slipped to 64.5, a decrease of 0.6 from the February reading. There was a sharper decline in the production index, which fell to 57.6 from 62.9. Order backlogs increased to 57.4 from 57, which analysts say will help support production in Q2 and Q3. The employment index, though, strengthened sharply to 58.9 from 54.2. Inflation pressures within manufacturing increased, as ISM’s prices index was 70.5 in March, a jump of 2.5 points. The change indicates higher raw materials prices.
Separate data from firm Markit showed its final March purchasing manager’s index fell to 53.3, below forecasts that called for a reading of 53.5. Markit’s numbers showed manufacturing growth slowed to a six-month low, with new orders coming in at the slowest pace since October. “The post-election resurgence of the manufacturing sector seen late last year is showing signs of losing steam,” said Chris Williamson, the chief business economist at IHS Markit. “The survey data have acted as a reliable advance guide to official data in the past, and in March indicate a slowing of output growth to an annualized rate of around 2%.”