U.S. ISM Manufacturing PMI & Prices Strengthen in March

The Purchasing Managers Index of activity in the manufacturing sector jumped to 50.3 in March after falling to 47.8 in February, according to the Institute for Supply Management. Moving above 50, the March index indicated a rise in U.S. manufacturing sector activity for the first time since September 2023, up from a low of 46.5 twelve months earlier. The index peaked at 64.0 in March 2021. A reading of 48.4 for last month had been expected in the Action Economics Forecast Survey.

Movement amongst the index components was mixed in March. Leading the upturn, the production index surged to 54.6 from 48.4 in February. Twenty-five percent (NSA) of survey participants reported increased orders while 13.0% reported declines. The inventories index jumped to 48.2 in March from 45.3 in February. It was increased from an October low of 43.6. Sixteen percent (NSA) of survey participants reported higher inventories while 17.8% reported decline. The employment index rose to 47.4 from 45.9, reversing its February decline. It has trended sideways for the last five months, remaining below last year’s high of 50.9 in September. Fourteen percent (NSA) of respondents reported higher employment while 18.1% indicated decline.

Also showing improvement, the new orders index of 51.4 last month compared to 49.2 in February. It remained below the January high of 52.5 but up from the January 2023 low of 42.8. Twenty-six percent (NSA) of survey respondents reported higher new orders while 16.2% reported decline. Easing slightly last month was the supplier delivery index to 49.9 from 50.1 in February. The index nevertheless remained above the May 2023 low of 43.5. Nine percent of survey respondents reported slower delivery speeds while 9.3% reported faster speeds.

The prices index strengthened to 55.8 (NSA) last month from 52.5 in February. It remained up from a low of 39.4 in December 2022. The index peaked at 92.1 in June 2021 and averaged 46.6 last year. Twenty-four percent of respondents reported higher prices last month while twelve percent reported price declines.

In other series, the export order index held steady in March at 51.6. It was the highest level since July 2022 and up from the January 2024 low of 45.2. Twelve percent (NSA) of respondents reported higher exports while 9.0% reported declines. The imports series held steady at 53.0, its highest level since July 2022. The order backlog index also was unchanged at 46.3 (NSA) last month, up from a low of 37.5 in May of last year.

The ISM figures are based on responses from over 400 purchasing executives from 20 industries, which correspond to their contribution to GDP in 50 states.

These data are diffusion indexes where a reading above 50 indicates expansion. The figures from the Institute for Supply Management can be found in Haver's USECON database; further detail is found in the SURVEYS database. The expectations number is available in Haver's AS1REPNA database.