March Manufacturing ISM Report On Business Shows Manufacturing Continuing to Grow

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 for the 27th consecutive month, and the overall economy grew for the 70th consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business.

Manufacturing expanded in March as the PMI registered 51.5 percent, a decrease of 1.4 percentage points when compared to February's reading of 52.9 percent, indicating growth in manufacturing for the 27th consecutive month.

ISM's New Orders Index registered 51.8 percent in March, a decrease of 0.7 percentage point when compared to the February reading of 52.5 percent, indicating growth in new orders for the 28th consecutive month.

ISM's Production Index registered 53.8 percent in March, which is an increase of 0.1 percentage point when compared to the 53.7 percent reported in February, indicating growth in production for the 31st consecutive month.

ISM's Employment Index registered 50 percent in March, which is a decrease of 1.4 percentage points when compared to the 51.4 percent reported in February. The March reading of 50 percent indicates that there was no change in manufacturing employment relative to February, and follows 21 consecutive months of growth in employment.

The delivery performance of suppliers to manufacturing organizations slowed in March at a slower rate as the Supplier Deliveries Index registered 50.5 percent. This month's reading is 3.8 percentage points lower than the 54.3 percent reported in February.

The Inventories Index registered 51.5 percent in March, which is 1 percentage point lower than the 52.5 percent registered in February, indicating raw materials inventories are growing for the third consecutive month.

The ISM Prices Index registered 39 percent in March, an increase of 4 percentage points when compared to the February reading of 35 percent, indicating a decrease in raw materials prices for the fifth consecutive month. In March, 10 percent of respondents reported paying higher prices, 32 percent reported paying lower prices, and 58 percent of supply executives reported paying the same prices as in February.

ISM's Backlog of Orders Index registered 49.5 percent in March, which is 2 percentage points lower than the 51.5 percent reported in February, indicating contraction in order backlogs following one month of expansion in order backlogs. Of the 84 percent of respondents who reported their backlog of orders, 18 percent reported greater backlogs, 19 percent reported smaller backlogs, and 63 percent reported no change from February.

Of the 18 manufacturing industries, 10 are reporting growth in March in the following order: Paper Products; Wood Products; Transportation Equipment; Fabricated Metal Products; Nonmetallic Mineral Products; Machinery; Chemical Products; Primary Metals; Food, Beverage & Tobacco Products; and Computer & Electronic Products. The seven industries reporting contraction in March — listed in order — are: Apparel, Leather & Allied Products; Textile Mills; Petroleum & Coal Products; Electrical Equipment, Appliances & Components; Miscellaneous Manufacturing; Plastics & Rubber Products; and Furniture & Related Products.

Keywords: Automation, Manufacturing, Process Industries, Discrete Industries, Supply Management, PMI, ISM, ARC Advisory Group.