The U.S. manufacturing industry is beginning to shake off the effects of an unusually harsh winter across the country. Although there are some lingering concerns about the adverse weather, one of the nation’s leading indicators, the Institute for Supply Management’s PMI®, inched up in March to 53.7% from 53.2% in February.
“It’s a good solid report,” said Bradley J. Holcomb, chair of the ISM’s Manufacturing Business Survey Committee. “It reflects good underlying demand that was pent up for the last couple of months.”
The weather wreaked havoc earlier in the year as transportation and logistics companies were stymied by heavy snow. The PMI in January and February fell below the 57% level it registered in November 2003, although a reading above 50% indicates growth. Production dropped and inventories also built up during the period.
Production in March grew by a substantial 7.7 percentage points to 55.9% - the highest level since June of 2009, said Holcomb, another indication of pent-up demand. New orders and employment also grew in March. “I also like that exports are up another 2 percent – it’s clear the world likes U.S.-manufactured goods. Imports are up as well [by 1 percent], indicating we are consuming raw materials. The global economy is beginning to flow, as seen in these metrics.”
Of the 18 manufacturing industries the ISM tracks, 14 are reporting growth in March: petroleum and coal products; transportation equipment; furniture and related products; paper products; printing and related support activities; plastics and rubber products; fabricated metal products; machinery; textile mills; computer and electronic products; nonmetallic mineral products; food, beverage and tobacco products; chemical products; and primary metals. Feedback from the electronics sector was positive: the year has started out well and the outlook remains bright.
The four industries reporting contraction in March are: apparel, leather and allied products; wood products; electrical equipment, appliances and components; and miscellaneous manufacturing. Several of those segments reported shortages of materials.
