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).”
Author: Steven Burke, Economist