The Institute of Supply Management reported that the Composite Index of activity in the manufacturing sector remained about unchanged in March at 55.2 versus 55.3 in February. Consensus expectations had been for 55.0.

During the last twenty years there has been a 69% correlation between the level of the Composite Index and the three month growth in factory sector industrial production.

Only the new orders (57.1) and inventories (54.1) components rose. The production index (56.5) continued its slide from the January '04 peak of 69.0 and the employment index (53.3) reversed all of the prior two months' gains. During the last twenty years there has been a 69% correlation between the level of the ISM Employment Index and the three month growth in factory sector employment.

The vendor deliveries index (52.5) fell sharply to the lowest level since 2003 and the index of export orders (55.4) also fell hard to the lowest in six months.

The prices paid index recovered more than all of the prior two months' decline but remained off the April '04 high of 88.0.