Manufacturing PMI Posts Modest March Dip, But Remains Strong

The Institute of Supply Management's Purchasing Managers Index slid 1.5 percentage points to 59.3 in March, but that mark remains a healthy rate of expansion for the U.S. manufacturing economy — well above where it was 11 months ago.

TEMPE, AZ — Economic activity in the manufacturing sector expanded in March, and the overall economy grew for the 107th consecutive month, 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 March PMI registered 59.3 percent, a decrease of 1.5 percentage points from the February reading of 60.8 percent
  • The New Orders Index registered 61.9 percent, a decrease of 2.3 percentage points from the February reading of 64.2 percent
  • The Production Index registered 61 percent, a 1 percentage point decrease compared to the February reading of 62 percent
  • The Employment Index registered 57.3 percent, a decrease of 2.4 percentage points from the February reading of 59.7 percent
  • The Supplier Deliveries Index registered 60.6 percent, a 0.5 percentage point decrease from the February reading of 61.1 percent
  • The Inventories Index registered 55.5 percent, a decrease of 1.2 percentage points from the February reading of 56.7 percent
  • The Prices Index registered 78.1 percent in March, a 3.9 percentage point increase from the February reading of 74.2 percent, indicating higher raw materials prices for the 25th consecutive month

Comments from the panel reflect continued expanding business strength. Demand remains robust, with the New Orders Index at 60 or above for the 11th straight month, and the Customers’ Inventories Index at its lowest level since July 2011. The Backlog of Orders Index continued a 14-month expansion with its highest reading since May 2004, when it registered 63 percent. Consumption, described as production and employment, continues to expand, with indications that labor and skill shortages are affecting production output. Inputs, expressed as supplier deliveries, inventories and imports, were negatively impacted by weather conditions; Asian holidays; lead time extensions; steel and aluminum disruptions across many industries; supplier labor issues; and transportation difficulties due to driver and equipment shortages. Export orders remained strong, supported by a weaker U.S. currency. The Prices Index is at its highest level since April 2011, when it registered 82.6 percent. In March, price increases occurred across 17 of 18 industry sectors. Demand remains robust, but the nation’s employment resources and supply chains are still struggling to keep up.”

Of the 18 manufacturing industries, 17 reported growth in March, in the following order: Fabricated Metal Products; Plastics & Rubber Products; Computer & Electronic Products; Paper Products; Printing & Related Support Activities; Nonmetallic Mineral Products; Transportation Equipment; Petroleum & Coal Products; Wood Products; Machinery; Chemical Products; Textile Mills; Electrical Equipment, Appliances & Components; Furniture & Related Products; Miscellaneous Manufacturing; Food, Beverage & Tobacco Products; and Primary Metals. The only industry reporting a decrease during the period is Apparel, Leather & Allied Products.


Index Series Index Mar Series Index Feb Percentage Point Change Direction Rate of Change Trend* (Months)
PMI® 59.3 60.8 -1.5 Growing Slower 19
New Orders 61.9 64.2 -2.3 Growing Slower 27
Production 61.0 62.0 -1.0 Growing Slower 19
Employment 57.3 59.7 -2.4 Growing Slower 18
Supplier Deliveries 60.6 61.1 -0.5 Slowing Slower 18
Inventories 55.5 56.7 -1.2 Growing Slower 3
Customers’ Inventories 42.0 43.7 -1.7 Too Low Faster 18
Prices 78.1 74.2 +3.9 Increasing Faster 25
Backlog of Orders 59.8 59.8 0.0 Growing Same 14
New Export Orders 58.7 62.8 -4.1 Growing Slower 25
Imports 59.7 60.5 -0.8 Growing Slower 14
OVERALL ECONOMY Growing Slower 107
Manufacturing Sector Growing Slower 19

Manufacturing ISM Report On Business data is seasonally adjusted for the New Orders, Production, Employment and Supplier Deliveries Indexes.
*Number of months moving in current direction.
Indexes reflect newly released seasonal adjustment factors.

Month PMI
March 2018 59.3
February 2018 60.8
January 2018 59.1
December 2017 59.3
November 2017 58.2
October 2017 58.5
September 2017 60.2
August 2017 59.3
July 2017 56.5
June 2017 56.7
May 2017 55.5
April 2017 55.3
12-month average - 58.2; High - 60.8; Low - 55.3

Average for 12 months - 58.2. High - 60.8; Low - 55.3