Economic activity in the manufacturing sector improved in March, and the overall economy grew for the 10th consecutive month — after it had dipped significantly in the early stages of the coronavirus — according to the nation’s supply executives in the latest Manufacturing ISM Report on Business.
The March Manufacturing PMI registered 64.7%, an increase of 3.9% from the February reading of 60.8%. This figure indicates expansion in the overall economy for the 10th month in a row after contraction in April. The New Orders Index registered 68%, up 3.2% from the February reading of 64.8%. The Production Index registered 68.1%, an increase of 4.9% compared to the February reading of 63.2%. The Backlog of Orders Index registered 67.5%, 3.5% above the February reading of 64%. The Employment Index registered 59.6%, 5.2% higher than the February reading of 54.4%. The Supplier Deliveries Index registered 76.6%, up 4.6% from the February figure of 72%.
The Inventories Index registered 50.8%, 1.1% higher than the February reading of 49.7%. The Prices Index registered 85.6%, down 0.4%age point compared to the February reading of 86%. The New Export Orders Index registered 54.5%, a decrease of 2.7% compared to the February reading of 57.2%. The Imports Index registered 56.7%, a 0.6-percentage point increase from the February reading of 56.1%.
“The manufacturing economy continued its recovery in March,” said Timothy R. Fiore, chair of the Institute for Supply Management Manufacturing Business Survey Committee. “However, Survey Committee Members reported that their companies and suppliers continue to struggle to meet increasing rates of demand due to coronavirus (COVID-19) impacts limiting availability of parts and materials. Extended lead times, wide-scale shortages of critical basic materials, rising commodities prices and difficulties in transporting products are affecting all segments of the manufacturing economy. Worker absenteeism, short-term shutdowns due to part shortages, and difficulties in filling open positions continue to be issues that limit manufacturing-growth potential.
Of the 18 manufacturing industries, 17 reported growth in March, in the following order: Textile Mills; Electrical Equipment, Appliances & Components; Machinery; Computer & Electronic Products; Apparel, Leather & Allied Products; Furniture & Related Products; Fabricated Metal Products; Food, Beverage & Tobacco Products; Primary Metals; Plastics & Rubber Products; Paper Products; Transportation Equipment; Chemical Products; Nonmetallic Mineral Products; Miscellaneous Manufacturing; Printing & Related Support Activities; and Petroleum & Coal Products. No industries reported contraction in March.