March 2024 Manufacturing ISM Report On Business Reports Manufacturing and Production Back Into Expansion Territory

Author photo: Steve Clouther
BySteve Clouther
Industry Trends

The Manufacturing ISM Report On Business is published monthly by the Institute for Supply Management (ISM), the largest supply management organization in the world, as well as one of the most respected. Economic activity in the manufacturing sector expanded in March after contracting for 16 consecutive months, say the nation's supply executives in the latest Manufacturing ISM Report On Business.

The U.S. manufacturing sector expanded in March, as the Manufacturing PMI registered 50.3 percent, up 2.5 percentage points compared to February’s reading of 47.8 percent. This is first instance of expansion in 16 months.

ISM’s New Orders Index expanded for just the third time in 22 months in March, registering 51.4 percent, an increase of 2.2 percentage points compared to February’s reading of 49.2 percent.

The Production Index surged back into expansion territory in March, registering 54.6 percent, 6.2 percentage points higher than the February reading of 48.4 percent. The Production Index had been in contraction for 11 of the previous 15 months.

ISM’s Employment Index registered 47.4 percent in March, 1.5 percentage points higher than the February reading of 45.9 percent.

Delivery performance of suppliers to manufacturing organizations was marginally faster in March after one month of slowing preceded by 16 straight months in “faster” territory. The Supplier Deliveries Index, which registered 49.9 percent, was 0.2 percentage point lower than the 50.1 percent reported in February.

The Inventories Index registered 48.2 percent in March, 2.9 percentage points higher than the 45.3 percent reported in February. Manufacturing inventories contracted at a slower rate compared to the previous month.

ISM’s Backlog of Orders Index registered 46.3 percent, the same figure as in February, indicating order backlogs contracted for the 18th consecutive month after a 27-month period of expansion.

The nine manufacturing industries reporting growth in March — in order — are: Textile Mills; Nonmetallic Mineral Products; Paper Products; Petroleum & Coal Products; Primary Metals; Food, Beverage & Tobacco Products; Fabricated Metal Products; Chemical Products; and Transportation Equipment. The six industries reporting contraction in March — in the following order — are: Furniture & Related Products; Plastics & Rubber Products; Electrical Equipment, Appliances & Components; Machinery; Computer & Electronic Products; and Miscellaneous Manufacturing.

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