The overall economy grew for the 119th straight time, the Institute for Supply Management reported Monday.
According to the ISM's monthly report on business, the ISM index increased to 55.3 in March from 54.2 in February.
Economists polled by IFR Markets predicted the index would be 54.2.
An index reading below 50 signals a slowing economy, while a level above 50 suggests expansion. A reading of 50 shows the sector was unchanged in the month.
The prices index rose to 54.3 from 49.4, “indicating a return of increasing raw materials prices after a two-month respite,” according to the report. The employment index gained to 57.5 from 52.3.
The production index grew to 55.8 from 54.8, the new orders index increased to 57.4 from 55.5; the supplier deliveries index slipped to 54.2 from 54.9; the export orders index fell to 51.7 from 52.8; and the imports index declined to 51.1 from 55.3.
The inventories index dropped to 51.8 from 53.4; the customers' inventories index rose to 42.7 from 39.0; and backlog of orders slipped to 50.4 from 52.3.
Respondents' comments included:
- "Customer orders remain strong." (Textile Mills)
- "The electronics industry seems to be slowly coming out of crisis mode. Lead times and costs have leveled out in some commodities, and dynamic random access memory (DRAM) prices are actually coming down." (Computer & Electronic Products)
- "Brexit continues to be a concern, despite the fact that our organization has already rolled out a plan to minimize its impact." (Chemical Products)
- "Business remains very strong amid rumors of a slowdown, but forecasts do not indicate this. Electronics are at tight capacity from manufacturers, with no [change] in the near future." (Transportation Equipment)
- "Strong customer orders continue." (Food, Beverage & Tobacco Products)
- "Current weather conditions causing significant delivery delays [and] diminishing our production capabilities." (Machinery)
- "Strong business momentum coming into January and early February has slowed to typical seasonal business conditions for our industry." (Miscellaneous Manufacturing)
- "General procurement levels remain strong based on demand. Backlog for domestic new and repaired equipment continues to grow. Production meeting customer delivery requirements is a challenge. Still experiencing a skills gap in hiring qualified shop personnel, machinists and mechanics." (Fabricated Metal Products)
- "Steel tariffs continue to put upward pressure on our input costs. The government shutdown delayed the process of gaining exemptions to the tariffs." (Petroleum & Coal Products)
- "Awaiting with anticipation the outcome of the U.S.-China trade deal." (Plastics and Rubber Products)
- "Experienced a reduction in orders, with forecasted softness going into Q2." (Primary Metals)
- "Weather in the domestic market is constraining homebuilding across the nation — too wet in the south, severe winter in the north. Expectations are that homebuilding backlog is growing, and a surge of domestic business will come in May and June. Internationally, the Chinese trade war is still holding business back, but expectations are that in April or May, business will spring back materially as tariffs resolve." (Wood Products)
- "Skilled labor is still tough to find." (Apparel, Leather & Allied Products)
- "Steel in U.S. remains strong, driving numerous product lines." (Nonmetallic Mineral Products)
- "Business is very strong and has been for over two years." (Furniture & Related Products)
