U.S. Manufacturing Index Dips More Than Expected In March
(RTTNews) - Manufacturing activity in the U.S. contracted at a slightly faster rate in the month of March, according to a report released by the Institute for Supply Management on Monday.
The ISM said its manufacturing PMI dipped to 46.3 in March from 47.7 in February, with a reading below 50 indicating a contraction. Economists had expected the index to edge down to 47.5.
With the bigger than expected decrease, the manufacturing PMI dropped to its lowest level since hitting 43.5 in May 2020.
"With Business Survey Committee panelists reporting softening new order rates over the previous 10 months, the March composite index reading reflects companies continuing to slow outputs to better match demand for the first half of 2023 and prepare for growth in the late summer/early fall period," said Timothy R. Fiore, Chair of the ISM Manufacturing Business Survey Committee.
The decline by the headline index partly reflected an accelerated contraction in new orders, as the new orders index fell to 44.3 in March from 47.0 in February.
The employment index also slid to 46.9 in March from 49.1 in February, indicating a continued contraction in employment in the manufacturing sector.
Meanwhile, the report said the production index inched up to 47.8 in March from 47.3 in February, suggesting a slightly slower pace of contraction.
The ISM also said the prices index fell 49.2 in March from 51.3 in February, suggesting prices decreased following one month of growth.
On Wednesday, the ISM is scheduled to release a separate report on service sector activity in the month of March. The services PMI is currently expected to slip to 54.5 in March from 55.1 in February.
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