United States PMI March 2021

United States

United States: ISM manufacturing index rises in March

April 1, 2021

The Institute for Supply Management (ISM) manufacturing index increased to 64.7 in March from 60.8 in February, and beat market expectations of a 61.3 reading. Consequently, the index moved above the 50-threshold that separates expansion from contraction in the manufacturing sector.

March’s improvement was the result of stronger growth in new orders, production and employment levels relative to the previous month. Moreover, backlogs of work increased in March, while new export orders rose at a softer pace. On the price front, input prices continued to rise on the back of higher raw material prices albeit at a weaker pace compared to the month prior.

Commenting on the state of the manufacturing sector with regard to March’s print, analysts at Goldman Sachs noted:

“The composition of the report was strong, with increases in the production, new orders, and employment components. The prices paid measure declined slightly from its 12-year high in February. Construction spending declined modestly in February, likely reflecting winter storms. We left our Q1 GDP tracking estimate unchanged at +7.5% (qoq ar).”

FocusEconomics Consensus Forecast panelists expect industrial production to rise 4.6% in 2021, which is down 0.1 percentage points from last month’s forecast. In 2022, panelists see industrial production rising 3.5%.

Author:, Economist

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United States PMI Chart

United States PMI March 2021

Note: Composite index in the Manufacturing Report on Business (PMI). Readings above 50% indicate an expansion in the manufacturing sector while readings below 50% point to a contraction.
Source: Institute for Supply Management.

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