NEW YORK – The overall economy grew for the twenty-second straight time, while the manufacturing sector expanded for the twentieth time, the Institute for Supply Management reported Friday.
According to the ISM’s monthly report on business, the ISM index dipped to 61.2 in March from 61.4 in February.
Economists polled by Thomson Reuters predicted the index would rise to 61.0.
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 recent trend of rapid growth in the manufacturing sector continued in March, as the PMI registered above 60 percent for the third consecutive month," said Norbert J. Ore, chair of the Institute of Supply Management's manufacturing business survey committee. “The component indexes of the PMI remain at very positive levels and signal strong sector performance in the first quarter. While manufacturers are benefiting from strength in new orders and production, there is significant concern with regard to commodity prices. Many manufacturers indicate the prices they have to pay for inputs are rising, and there is concern about the impact of higher prices on their margins.”
The closely watched prices paid index grew to 85.0 from 82.0. The employment index was at 63.0, down from 64.5 the prior month.
The production index increased to 69.0 from 66.3, the new orders index fell to 63.3 from 68.0; the supplier deliveries index jumped to 63.1 from 59.4; the export orders index decreased to 56.0 from 62.5; and the imports index rose to 56.5 from 55.0.
The inventories index decreased to 47.4 from 48.8; the customers’ inventories index fell to 39.5 from 40.0; and backlog of orders slipped to 52.5 from 59.0.
Respondents’ comments included:
“Customer orders have picked up nicely. [This is] likely in anticipation of increasing prices due to commodity costs that will likely happen over next month." (Food, Beverage & Tobacco Products)
"New orders continue at a robust pace this month." (Miscellaneous Manufacturing)
"What will be the impact to the U.S. supply chain after the devastation caused by the Japan earthquake?" (Chemical Products)
"The building side of our business is mired with little hope of a rebound anytime soon." (Fabricated Metal Products)
"Steel and certain steel products causing concern over price increases and availability." (Machinery)
