ISM reports steady manufacturing growth in March

In its March Manufacturing Report on Business, the ISM reported that the index it uses to measure the manufacturing sector—known as the PMI—was 61.2 percent, a 0.2 percent decline from February’s 61.4. February matched the highest PMI level since May 2004.

By ·

Manufacturing activity remains on very strong footing, according to data released by the Institute for Supply Management (ISM).

In its March Manufacturing Report on Business, the ISM reported that the index it uses to measure the manufacturing sector—known as the PMI—was 61.2 percent, a 0.2 percent decline from February’s 61.4. February matched the highest PMI level since May 2004.

Any reading 50 or higher represents economic growth, and March is the 22nd consecutive month economic growth has occurred, according to the report. But the 0.2 percent decline snaps a seventh straight month of month-over-month manufacturing growth.

“The recent trend of rapid growth in the manufacturing sector continued in March, as the PMI registered above 60 percent for the third consecutive month,” said Norbert J. Ore, CPSM, C.P.M., chair of the Institute for Supply Management Manufacturing Business Survey Committee, in a statement.  “The component indexes of the PMI remain at very positive levels and signal strong sector performance in the first quarter. While manufacturers are benefiting from strength in new orders and production, there is significant concern with regard to commodity prices. Many manufacturers indicate the prices they have to pay for inputs are rising, and there is concern about the impact of higher prices on their margins.”

New Orders at 63.3 were down 4.7 percent from February, and Production at 69.0 was up 2.7 percent. Employment at 63.0 was down 1.5 percent. Inventories were down 1.4 percent at 47.4, and Customers’ Inventories at 39.5 were off by 0.5 percent. Backlog of orders was down 6.5 percent at 52.5, and Prices at 85.0 percent dropped 0.5 percent.

In an interview, Ore said that even with a 0.2 percent decline, the manufacturing sector is growing at a similar rate to where it has been the last few months.

“The remarkable thing is we have averaged over 60 for the entire first quarter, which indicates a strong amount of momentum,” said Ore. “The first quarter is usually not this strong. It is a very strong performance. If the rest of the economy was behaving like manufacturing, things would be very strong right now, especially in terms of job creation.

With New Orders down nearly 5 percent, Ore explained that February New Orders at 68.0 “were absolutely off the charts and had to come back to reality a bit. And Production has subsequently increased due to gains in New Orders, too.

Export growth, explained Ore, also plays a large factor in New Orders and Production data. February exports at 62.5 drove up that month’s New Orders data at 68.0, and exports were down 6.5 percent in March at 56.0, which was a steeper decline than March’s New Orders at 4.7 percent.

Despite the sequential decline, the current New Orders reading represents a very positive indication for the manufacturing sector going forward.

On the Employment front, even though March fell 1.5 percent, Ore explained that manufacturers are very willing to hire now where there is a need for it.

“They are filling lots of positions for supply chain jobs, which are picking up dramatically,” he said. “Some of those positions were cut back during the recession and are now being replaced.”

For related articles, please click here.


About the Author

Jeff Berman, Group News Editor
Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. Contact Jeff Berman

Subscribe to Logistics Management Magazine!

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.
Start your FREE subscription today!

Latest Whitepaper
Just Released: Understanding Hazmat Transportation Management
The rules and regulations governing the transportation of hazardous materials (hazmat) are complex.
Download Today!
From the July 2017 Logistics Management Issue
E-commerce continues to fuel a boom that’s tempered by overcapacity, rate pressures, sluggish demand and political doubt. The result: “cognitive dissonance” that finds a $1.4 trillion market scratching its head.
2017 Truckload Brokerage Roundtable: Technology continues to connect the dots
Cloud Transportation Management Systems (TMS): Weis Markets streamlines “both sides” of the DC door
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Getting the most out of your 3PL relationship
Join Evan Armstrong, president of Armstrong & Associates, as he explains how creating a balanced portfolio of "Top 50" global and domestic partners can maximize efficiency and mitigate risk.
Register Today!
EDITORS' PICKS
28th Annual State of Logistics: Into the great unknown
E-commerce continues to fuel a boom that’s tempered by overcapacity, rate pressures, sluggish...
2017 Top 50 3PLs: Investment and Consolidation Maintain Traction
The trend set over the past few years for mergers and acquisitions has hardly subsided, and a fresh...

The Evolution of the Digital Supply Chain
Everyone is talking about terms like digitization, Industry 4.0 and digital supply chain management,...
2017 Salary Survey: Fresh Voices Express Optimism
Our “33rd Annual Salary Survey” reflects more diversity entering the logistics management...