Economic activity in the manufacturing sector expanded in March for the 27th consecutive month, however, at a slower pace than February, and the overall economy grew for the 70th consecutive month, according to the Manufacturing ISM Report On Business issued April 1, by the Institute for Supply Management.
The report is based on data compiled from purchasing and supply executives nationwide, including new orders, production, employment, supplier deliveries, inventories, prices, backlog of orders, exports and imports.
The March PMI (Purchasing Manager’s Index) registered 51.5 percent, a decrease of 1.4 percentage points from February’s reading of 52.9 percent. In fact, this was the fifth-straight month the PMI has declined, although anything above 50 is still considered expansion rather than contraction.
According to an Industry Week report, “the declines are a sign companies are struggling with a strong dollar holding back exports. Meanwhile, investment from oil companies has dropped as the price of oil has taken a dive.”
Comments from the panel of purchasing and supply executives surveyed refer to continuing challenges from the West Coast port issue, lower oil prices having both positive and negative impacts depending upon the industry, residual effects of the harsh winter, higher costs of healthcare premiums, and challenges associated with the stronger dollar on international business.
The New Orders Index registered 51.8 percent, a decrease of 0.7percentage point from the reading of 52.5 percent in February. The Production Index registered 53.8 percent, 0.1 percentage point above the February reading of 53.7 percent.
The Employment Index registered 50 percent, 1.4 percentage points below the February reading of 51.4 percent, reflecting unchanged employment levels from February.
Inventories of raw materials registered 51.5 percent, a decrease of 1 percentage point from the February reading of 52.5 percent.
The Prices Index registered 39 percent, 4 percentage points above the February reading of 35 percent, indicating lower raw materials prices for the fifth consecutive month.
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.
The next Manufacturing ISM Report On Business, featuring the April 2015 data will be released on May 1, 2015.