Manufacturing Economy Grew Again In March
The manufacturing economy continued to grow in March while supplier deliveries slowed further, U.S. supply chain executives said in the latest Manufacturing ISM Report on Business. Executives voiced optimism about this year’s business outlook, although adverse weather continued to put pressure on some companies.
Economic activity in the manufacturing sector grew for the 10th straight month and the overall economy expanded for the 58th consecutive month, according to the report from Bradley J. Holcomb, CPSM, CPSD, chair of the Institute for Supply Management Manufacturing Business Survey Committee.
“The March PMIregistered 53.7 percent, an increase of 0.5 percentage point from February’s reading of 53.2 percent, indicating expansion in manufacturing for the 10th consecutive month. 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,” Holcomb said in a press release.
“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. Several comments from the panel reflect favorable demand and good business conditions, with some lingering concerns about the particularly adverse weather conditions across the country.”
The PMI is a composite index based on the diffusion indexes of five of the indexes with equal weights: new orders (seasonally adjusted), production (seasonally adjusted), employment (seasonally adjusted), supplier deliveries (seasonally adjusted), and inventories, according to ISM.
Fourteen of the 18 manufacturing industries reported growth in March and 10 industries reported higher employment.
Suppliers’ delivery performance to manufacturers slowed at a slower pace than it did in February, according to the report; nine industries reported slower supplier deliveries in March.
Among comments from those surveyed, a food, beverage and tobacco products executives said adverse weather has created “major delays” on inbound materials and outbound sales. A wood products executive noted that a short supply of hardwood lumber continued to challenge the company’s ability to maximize sales volume targets, although demand was sound.
A fabricated metal products exec said first-quarter business remained strong, and a transportation equipment manager voiced optimism that orders will continue at a decent pace. A furniture industry exec said business continues to improve, and the economy was looking positive, with stable commodities, for a machinery industry manager.
More of ISM’s March manufacturing data can be found here.
In the petroleum and coal industry, business was starting to heat up along with the weather, one executive said.