Manufacturing expanded in March and the general U.S. economy grew for the 107th consecutive month, according to the nation’s supply executives in the latest Manufacturing ISM Report On Business.
The March PMI registered at 59.3 percent, a decrease of 1.5 percentage points from the February reading of 60.8 percent. The Report On Business measures its data using the Purchasing Manager’s Index (PMI), which is an indicator of economic health in the manufacturing sector. A reading above 50 percent indicates that the manufacturing economy is generally expanding, while below 50 percent indicates that it is generally contracting.
“This indicates strong growth in manufacturing for the 19th consecutive month, led by continued expansion in new orders, production activity, employment and inventories, with suppliers continuing to struggle delivering to demand,” said Timothy R. Fiore, chair of the Institute for Supply Management (ISM) Manufacturing Business Survey Committee.
“Comments from the panel reflect continued expanding business strength. Demand remains robust, with the New Orders Index at 60 or above for the 11th straight month, and the Customers’ Inventories Index at its lowest level since July 2011,” Fiore continued. “The Backlog of Orders Index continued a 14-month expansion with its highest reading since May 2004, when it registered 63 percent. Consumption—described as production and employment— continues to expand with indications that labor and skill shortages are affecting production output.
“Inputs, expressed as supplier deliveries, inventories and imports, were negatively impacted by weather conditions; Asian holidays; lead time extensions; steel and aluminum disruptions across many industries; supplier labor issues; and transportation difficulties due to driver and equipment shortages.
“Export orders remained strong, supported by a weaker U.S. currency. The Prices Index is at its highest level since April 2011, when it registered 82.6 percent. In March, price increases occurred across 17 of 18 industry sectors. Demand remains robust, but the nation’s employment resources and supply chains are still struggling to keep up.”
Of the 18 manufacturing industries, 17 reported growth in March, in the following order: Fabricated metal products; plastics & rubber products; computer & electronic products; paper products; printing & related support activities; nonmetallic mineral products; transportation equipment; petroleum & coal products; wood products; machinery; chemical products; textile mills; electrical equipment, appliances & components; furniture & related products; miscellaneous manufacturing; food, beverage & tobacco products; and primary metals.
The only industry reporting a decrease during the period is apparel, leather & allied products. Two industries reported contraction during the period: Apparel, leather & allied products; and furniture & related products.
Commodities Up in Price
Aluminum, caustic soda, cobalt, copper, corrugate, freight, resin based products, steel, cold rolled steel, fabricated and machined steel parts, galvanized steel, hot rolled steel and scrap steel.
Commodities Down in Price
Commodities in Short Supply
Capacitors, resistors, and silicone.