March Sees a Return to Contraction for US Manufacturing

The Institute for Supply Management (ISM) reported a contraction in US manufacturing activity for March, with the Purchasing Managers' Index (PMI) falling to 49% from February's 50.3%. This decline signals a challenging period for the sector, as key indicators showed significant drops.

Key Indicators Show Widespread Declines

New Orders Index plummeted to 45.2% from 48.6%, while the Production Index decreased by 2.4 percentage points to 48.3%. The Employment Index also saw a sharp decline, dropping 2.9 percentage points to 44.7%. In contrast, the Prices Index surged by seven percentage points to 69.4%, highlighting inflationary pressures.

Expert Insights on the March Data

"The sector is facing demand confusion, leading to reduced production and staffing adjustments. Rising prices, partly due to tariffs, are causing delays in order placements and supplier deliveries, alongside an increase in manufacturing inventories," explained Timothy R. Fiore, Chair of the ISM Manufacturing Business Survey Committee.