U.S. March ISM Manufacturing Index Falls to 51.5% in March; Est. at 52.5%

(Updated - April 1, 2015 10:03 AM EDT)

U.S. March ISM Manufacturing index falls to 51.5 from 52.9 and the estimate of 52.5.

UPDATE - More from the ISM press release:

Economic activity in the manufacturing sector expanded in March for the 27th consecutive month, and the overall economy grew for the 70th consecutive month, say the nation’s supply executives in the latest Manufacturing ISM^® Report On Business^®.

The report was issued today by Bradley J. Holcomb, CPSM, CPSD, chair of the Institute for Supply Management^® (ISM^®) Manufacturing Business Survey Committee. "The March PMI^® registered 51.5 percent, a decrease of 1.4 percentage points from February’s reading of 52.9 percent. The New Orders Index registered 51.8 percent, a decrease of 0.7 percentage point from the reading of 52.5 percent in February. The Production Index registered 53.8 percent, 0.1 percentage point above the February reading of 53.7 percent. The Employment Index registered 50 percent, 1.4 percentage points below the February reading of 51.4 percent, reflecting unchanged employment levels from February. Inventories of raw materials registered 51.5 percent, a decrease of 1 percentage point from the February reading of 52.5 percent. The Prices Index registered 39 percent, 4 percentage points above the February reading of 35 percent, indicating lower raw materials prices for the fifth consecutive month. Comments from the panel refer to continuing challenges from the West Coast port issue, lower oil prices having both positive and negative impacts depending upon the industry, residual effects of the harsh winter, higher costs of healthcare premiums, and challenges associated with the stronger dollar on international business."

Of the 18 manufacturing industries, 10 are reporting growth in March in the following order: Paper Products; Wood Products; Transportation Equipment; Fabricated Metal Products; Nonmetallic Mineral Products; Machinery; Chemical Products; Primary Metals; Food, Beverage & Tobacco Products; and Computer & Electronic Products. The seven industries reporting contraction in March — listed in order — are: Apparel, Leather & Allied Products; Textile Mills; Petroleum & Coal Products; Electrical Equipment, Appliances & Components; Miscellaneous Manufacturing; Plastics & Rubber Products; and Furniture & Related Products.

WHAT RESPONDENTS ARE SAYING ...

• "Falling energies have helped on the cost side while sales are getting a boost through improvements in consumer disposable income." (Food, Beverage & Tobacco Products)
• "Our business is still strong and on projection. Dollar strength is challenging for our international business." (Fabricated Metal Products)
• "Business is still extremely strong." (Transportation Equipment)
• "Oil prices impacting drilling and project activity. Pursuing cost reductions from suppliers for a wide variety of goods and services." (Petroleum & Coal Products)
• "Business really starting to slow down. Oil pricing is having a major effect on energy markets." (Computer & Electronic Products)
• "Steady Q1 demand but somewhat interrupted by weather." (Primary Metals)
• "Operating costs are higher due to increases in healthcare premiums." (Miscellaneous Manufacturing)
• "March business is improving over Jan-Feb, thawing out of this crazy winter." (Paper Products)
• "Dealing with ongoing delivery issues associated with congestion at the U.S. West Coast and Vancouver ports." (Machinery)
• "Congestion at the West Coast ports delaying incoming products." (Textile Mills)

MANUFACTURING AT A GLANCE MARCH 2015
Index	Series Index Mar	Series Index Feb	Percentage Point Change	Direction	Rate of Change	Trend* (Months)
PMI®	51.5	52.9	-1.4	Growing	Slower	27
New Orders	51.8	52.5	-0.7	Growing	Slower	28
Production	53.8	53.7	+0.1	Growing	Faster	31
Employment	50.0	51.4	-1.4	Unchanged	From Growing	1
Supplier Deliveries	50.5	54.3	-3.8	Slowing	Slower	22
Inventories	51.5	52.5	-1.0	Growing	Slower	3
Customers' Inventories	45.5	46.5	-1.0	Too Low	Faster	4
Prices	39.0	35.0	+4.0	Decreasing	Slower	5
Backlog of Orders	49.5	51.5	-2.0	Contracting	From Growing	1
Exports	47.5	48.5	-1.0	Contracting	Faster	3
Imports	52.5	54.0	-1.5	Growing	Slower	26
OVERALL ECONOMY				Growing	Slower	70
Manufacturing Sector				Growing	Slower	27

Manufacturing ISM^® Report On Business^® data is seasonally adjusted for New Orders, Production, Employment and Supplier Deliveries indexes.

*Number of months moving in current direction.

COMMODITIES REPORTED UP/DOWN IN PRICE AND IN SHORT SUPPLY

Commodities Up in Price

Dairy; Gasoline; Polypropylene Resin; and Steel — Hot Rolled*.

Commodities Down in Price

Aluminum (4); Carbon Steel (3); Copper (8); HDPE Resin (4); Nickel (3); Oil (4); PET Resin (5); Plastic Resin (4); Scrap Steel (4); Stainless Steel (5); Steel (4); Steel — Cold Rolled; and Steel — Hot Rolled (5)*.

Commodities in Short Supply

The only commodity listed in short supply during March is Trucking Services.

Note: The number of consecutive months the commodity is listed is indicated after each item.
*Reported as both up and down in price.

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