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Manufacturing PMI® at 50.3%; March 2024 Manufacturing ISM® Report On Business®New Orders Growing; Backlogs Contracting; Production Growing; Employment Contracting; Supplier Deliveries Faster; Raw Materials Inventories Contracting; Customers' Inventories Too Low; Prices Increasing; Exports and Imports Growing TEMPE, Ariz., April 1, 2024 /PRNewswire/ -- Economic activity in the manufacturing sector expanded in March after contracting for 16 consecutive months, say the nation's supply executives in the latest Manufacturing ISM® Report On Business®. The report was issued today by Timothy R. Fiore, CPSM, C.P.M., Chair of the Institute for Supply Management® (ISM®) Manufacturing Business Survey Committee: "The Manufacturing PMI® registered 50.3 percent in March, up 2.5 percentage points from the 47.8 percent recorded in February. The overall economy continued in expansion for the 47th month after one month of contraction in April 2020. (A Manufacturing PMI® above 42.5 percent, over a period of time, generally indicates an expansion of the overall economy.) The New Orders Index moved back into expansion territory at 51.4 percent, 2.2 percentage points higher than the 49.2 percent recorded in February. The March reading of the Production Index (54.6 percent) is 6.2 percentage points higher than February's figure of 48.4 percent. The Prices Index registered 55.8 percent, up 3.3 percentage points compared to the reading of 52.5 percent in February. The Backlog of Orders Index registered 46.3 percent, the same reading as in February. The Employment Index registered 47.4 percent, up 1.5 percentage points from February's figure of 45.9 percent. "The Supplier Deliveries Index figure of 49.9 percent is 0.2 percentage point lower than the 50.1 percent recorded in February. (Supplier Deliveries is the only ISM® Report On Business® index that is inversed; a reading of above 50 percent indicates slower deliveries, which is typical as the economy improves and customer demand increases.) The Inventories Index increased 2.9 percentage points to 48.2 percent following a reading of 45.3 percent in February. "The New Export Orders Index reading of 51.6 percent is the same reading as registered in February. The Imports Index continued in expansion territory, registering 53 percent, the same figure as in February. Both indexes repeated their highest readings since July 2022, when the New Export Orders Index registered 52.6 percent and the Imports Index registered 54.4 percent." Fiore continues, "The U.S. manufacturing sector moved into expansion for the first time since September 2022. Demand was positive, output strengthened and inputs remained accommodative. Demand improvement was reflected by the (1) New Orders Index back in expansion and fewer comments regarding 'softening,' (2) New Export Orders Index expanding again, supported by panelists' stronger optimism (3) Backlog of Orders Index remaining in moderate contraction territory, the same as in February and (4) Customers' Inventories Index contracting for the fourth consecutive month, remaining at a level accommodative for future production. Output (measured by the Production and Employment indexes) surged, with a combined 7.7-percentage point upward impact on the Manufacturing PMI® calculation. Panelists' companies notably increased their production levels month over month. Head-count reductions continued in March, with sizable layoff activity reported. Inputs — defined as supplier deliveries, inventories, prices and imports — continued to accommodate future demand growth and showed signs of stiffening. The Supplier Deliveries Index dropped marginally, moving into 'faster' territory, and the Inventories Index improved but remained in slight contraction territory. The Prices Index moved further upward in moderate expansion (or 'increasing') territory as commodity driven costs remain unstable. "Of the six biggest manufacturing industries, four — Food, Beverage & Tobacco Products; Fabricated Metal Products; Chemical Products; and Transportation Equipment, which account for a combined 54 percent of manufacturing gross domestic product (GDP) — registered growth in March. "Demand remains at the early stages of recovery, with clear signs of improving conditions. Production execution surged compared to January and February, as panelists' companies reenter expansion. Suppliers continue to have capacity but are showing signs of struggling, due in large part to their raw material supply chains. Thirty percent of manufacturing GDP contracted in March, down from 40 percent in February. More importantly, the share of sector GDP registering a composite PMI® calculation at or below 45 percent — a good barometer of overall manufacturing weakness — was 1 percent in March, the same as in February, but categorically healthier than the 27 percent recorded in January. Among the top six industries by contribution to manufacturing GDP in March, none had a PMI® at or below 45 percent," says Fiore. The nine manufacturing industries reporting growth in March — in order — are: Textile Mills; Nonmetallic Mineral Products; Paper Products; Petroleum & Coal Products; Primary Metals; Food, Beverage & Tobacco Products; Fabricated Metal Products; Chemical Products; and Transportation Equipment. The six industries reporting contraction in March — in the following order — are: Furniture & Related Products; Plastics & Rubber Products; Electrical Equipment, Appliances & Components; Machinery; Computer & Electronic Products; and Miscellaneous Manufacturing. WHAT RESPONDENTS ARE SAYING
Manufacturing ISM® Report On Business® data is seasonally adjusted for the New Orders, Production, Employment and Inventories indexes. COMMODITIES REPORTED UP/DOWN IN PRICE AND IN SHORT SUPPLY Commodities Up in Price Commodities Down in Price Commodities in Short Supply Note: The number of consecutive months the commodity is listed is indicated after each item. MARCH 2024 MANUFACTURING INDEX SUMMARIES Manufacturing PMI® A Manufacturing PMI® above 42.5 percent, over a period of time, generally indicates an expansion of the overall economy. Therefore, the March Manufacturing PMI® indicates the overall economy grew for the 47th straight month after one month of contraction (April 2020). "The past relationship between the Manufacturing PMI® and the overall economy indicates that the March reading (50.3 percent) corresponds to a change of plus-2.2 percent in real gross domestic product (GDP) on an annualized basis," says Fiore. THE LAST 12 MONTHS
New Orders The 12 manufacturing industries that reported growth in new orders in March — in the following order — are: Nonmetallic Mineral Products; Paper Products; Primary Metals; Printing & Related Support Activities; Wood Products; Petroleum & Coal Products; Plastics & Rubber Products; Computer & Electronic Products; Fabricated Metal Products; Food, Beverage & Tobacco Products; Chemical Products; and Miscellaneous Manufacturing. The two industries reporting a decline in new orders in March are: Furniture & Related Products; and Transportation Equipment.
Production The 13 industries reporting growth in production during the month of March, in order, are: Paper Products; Printing & Related Support Activities; Nonmetallic Mineral Products; Petroleum & Coal Products; Chemical Products; Fabricated Metal Products; Food, Beverage & Tobacco Products; Transportation Equipment; Computer & Electronic Products; Miscellaneous Manufacturing; Primary Metals; Plastics & Rubber Products; and Electrical Equipment, Appliances & Components. The two industries reporting a decrease in production in March are: Furniture & Related Products; and Machinery.
Employment Of 18 manufacturing industries, seven reported employment growth in March in the following order: Textile Mills; Petroleum & Coal Products; Miscellaneous Manufacturing; Primary Metals; Transportation Equipment; Machinery; and Food, Beverage & Tobacco Products. The eight industries reporting a decrease in employment in March, in the following order, are: Plastics & Rubber Products; Furniture & Related Products; Printing & Related Support Activities; Paper Products; Chemical Products; Electrical Equipment, Appliances & Components; Fabricated Metal Products; and Computer & Electronic Products.
Supplier Deliveries† The four manufacturing industries reporting slower supplier deliveries in March are: Textile Mills; Food, Beverage & Tobacco Products; Chemical Products; and Transportation Equipment. The five industries reporting faster supplier deliveries in March are: Electrical Equipment, Appliances & Components; Machinery; Miscellaneous Manufacturing; Computer & Electronic Products; and Primary Metals. Nine industries reported no change in delivery performance in March compared to February.
Inventories Of 18 manufacturing industries, nine reported higher inventories in March, in the following order: Textile Mills; Nonmetallic Mineral Products; Paper Products; Petroleum & Coal Products; Fabricated Metal Products; Primary Metals; Electrical Equipment, Appliances & Components; Chemical Products; and Food, Beverage & Tobacco Products. The eight industries reporting lower inventories in March — in the following order — are: Wood Products; Printing & Related Support Activities; Furniture & Related Products; Plastics & Rubber Products; Computer & Electronic Products; Miscellaneous Manufacturing; Transportation Equipment; and Machinery.
Customers' Inventories† The two industries reporting customers' inventories as too high in March are: Apparel, Leather & Allied Products; and Electrical Equipment, Appliances & Components. The nine industries reporting customers' inventories as too low in March, in order, are: Primary Metals; Wood Products; Paper Products; Chemical Products; Machinery; Food, Beverage & Tobacco Products; Transportation Equipment; Miscellaneous Manufacturing; and Computer & Electronic Products. Seven industries reported no change in customers' inventories in March compared to February.
Prices† In March, the 11 industries that reported paying increased prices for raw materials, in order, are: Apparel, Leather & Allied Products; Printing & Related Support Activities; Textile Mills; Plastics & Rubber Products; Chemical Products; Miscellaneous Manufacturing; Nonmetallic Mineral Products; Petroleum & Coal Products; Food, Beverage & Tobacco Products; Computer & Electronic Products; and Machinery. The four industries reporting paying decreased prices for raw materials in March are: Furniture & Related Products; Primary Metals; Transportation Equipment; and Fabricated Metal Products.
Backlog of Orders† Of 18 manufacturing industries, the three that reported growth in order backlogs in March are: Wood Products; Primary Metals; and Computer & Electronic Products. The 12 industries reporting lower backlogs in March — in the following order — are: Furniture & Related Products; Petroleum & Coal Products; Machinery; Paper Products; Nonmetallic Mineral Products; Electrical Equipment, Appliances & Components; Fabricated Metal Products; Transportation Equipment; Miscellaneous Manufacturing; Plastics & Rubber Products; Chemical Products; and Food, Beverage & Tobacco Products.
New Export Orders† The eight industries reporting growth in new export orders in March — in the following order — are: Wood Products; Miscellaneous Manufacturing; Plastics & Rubber Products; Transportation Equipment; Fabricated Metal Products; Chemical Products; Food, Beverage & Tobacco Products; and Machinery. The four industries reporting a decrease in new export orders in March are: Paper Products; Furniture & Related Products; Electrical Equipment, Appliances & Components; and Computer & Electronic Products.
Imports† The seven industries reporting an increase in import volumes in March — listed in the following order — are: Paper Products; Fabricated Metal Products; Food, Beverage & Tobacco Products; Chemical Products; Computer & Electronic Products; Transportation Equipment; and Machinery. The two industries that reported lower volumes of imports in March are: Furniture & Related Products; and Electrical Equipment, Appliances & Components. Nine industries reported no change in imports in March compared to February.
†The Supplier Deliveries, Customers' Inventories, Prices, Backlog of Orders, New Export Orders, and Imports indexes do not meet the accepted criteria for seasonal adjustments. Buying Policy
About This Report The data presented herein is obtained from a survey of manufacturing supply executives based on information they have collected within their respective organizations. ISM® makes no representation, other than that stated within this release, regarding the individual company data collection procedures. The data should be compared to all other economic data sources when used in decision-making. Data and Method of Presentation Survey responses reflect the change, if any, in the current month compared to the previous month. For each of the indicators measured (New Orders, Backlog of Orders, New Export Orders, Imports, Production, Supplier Deliveries, Inventories, Customers' Inventories, Employment and Prices), this report shows the percentage reporting each response, the net difference between the number of responses in the positive economic direction (higher, better and slower for Supplier Deliveries) and the negative economic direction (lower, worse and faster for Supplier Deliveries), and the diffusion index. Responses are raw data and are never changed. The diffusion index includes the percent of positive responses plus one-half of those responding the same (considered positive). The resulting single index number for those meeting the criteria for seasonal adjustments (Manufacturing PMI®, New Orders, Production, Employment and Inventories) is then seasonally adjusted to allow for the effects of repetitive intra-year variations resulting primarily from normal differences in weather conditions, various institutional arrangements, and differences attributable to non-moveable holidays. All seasonal adjustment factors are subject annually to relatively minor changes when conditions warrant them. The Manufacturing PMI® is a composite index based on the diffusion indexes of five of the indexes with equal weights: New Orders (seasonally adjusted), Production (seasonally adjusted), Employment (seasonally adjusted), Supplier Deliveries, and Inventories (seasonally adjusted). Diffusion indexes have the properties of leading indicators and are convenient summary measures showing the prevailing direction of change and the scope of change. A Manufacturing PMI® reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally declining. A Manufacturing PMI® above 42.5 percent, over a period of time, indicates that the overall economy, or gross domestic product (GDP), is generally expanding; below 42.5 percent, it is generally declining. The distance from 50 percent or 42.5 percent is indicative of the extent of the expansion or decline. With some of the indicators within this report, ISM® has indicated the departure point between expansion and decline of comparable government series, as determined by regression analysis. The Manufacturing ISM® Report On Business® survey is sent out to Manufacturing Business Survey Committee respondents the first part of each month. Respondents are asked to report on information for the current month for U.S. operations only. ISM® receives survey responses throughout most of any given month, with the majority of respondents generally waiting until late in the month to submit responses to give the most accurate picture of current business activity. ISM® then compiles the report for release on the first business day of the following month. The industries reporting growth, as indicated in the Manufacturing ISM® Report On Business® monthly report, are listed in the order of most growth to least growth. For the industries reporting contraction or decreases, those are listed in the order of the highest level of contraction/decrease to the least level of contraction/decrease. Responses to Buying Policy reflect the percent reporting the current month's lead time, the approximate weighted number of days ahead for which commitments are made for Capital Expenditures; Production Materials; and Maintenance, Repair and Operating (MRO) Supplies, expressed as hand-to-mouth (five days), 30 days, 60 days, 90 days, six months (180 days), a year or more (360 days), and the weighted average number of days. These responses are raw data, never revised, and not seasonally adjusted. ISM ROB Content Except as explicitly and expressly permitted by ISM, you are strictly prohibited from creating works or materials (including but not limited to tables, charts, data streams, time-series variables, fonts, icons, link buttons, wallpaper, desktop themes, online postcards, montages, mashups and similar videos, greeting cards, and unlicensed merchandise) that derive from or are based on the ISM ROB Content. 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About Institute for Supply Management® (ISM®) The full text version of the Manufacturing ISM® Report On Business® is posted on ISM®'s website at www.ismrob.org on the first business day* of every month after 10:00 a.m. ET. The one exception is in January when the report is released on the second business day of the month. The next Manufacturing ISM® Report On Business® featuring April 2024 data will be released at 10:00 a.m. ET on Wednesday, May 1, 2024. *Unless the New York Stock Exchange is closed.
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