March Sees a Decline in US Manufacturing Activity

The Institute for Supply Management (ISM) reported a contraction in the US manufacturing sector for March, with the Purchasing Managers' Index (PMI) falling to 49%, down from February's 50.3%. This decline marks a return to contraction after a brief period of growth.

Key Indicators Show Widespread Weakness

Several key indicators underscored the sector's challenges. The New Orders Index dropped to 45.2% from 48.6%, and the Production Index decreased by 2.4 percentage points to 48.3%. The Employment Index also saw a significant decline, falling 2.9 percentage points to 44.7%. Conversely, the Prices Index experienced a sharp increase, rising seven percentage points to 69.4%.

Expert Insight into the March Data

"Demand and production have both retreated, and companies are continuing to reduce staffing levels in response to uncertain demand conditions. The acceleration in prices growth, largely due to tariffs, has led to delays in new order placements, slower supplier deliveries, and an increase in manufacturing inventories," explained Timothy R. Fiore, Chair of the ISM Manufacturing Business Survey Committee.