After sixteen months of continuous downsizing, a surprising report by the Institute of Supply Management revealed a slight growth in the U.S. manufacturing activity in March. The Institute's PMI (Purchasing Managers' Index) for the manufacturing sector notably increased to 50.3 in March from 47.8 in February, surpassing the 50 mark that signifies growth. Experts had previously projected a minor rise to 48.4.
This unexpected substantial rise brought the index back to a realm of expansion for the first time since September 2022. This recovery was partially spearheaded by a significant turnaround in production, as exhibited by the surge of the production index to 54.6 in March from 48.4 in February.
In tune with this, the new orders index also reverted back to a state of expansion, rising from 49.2 to 51.4 in March. The employment index also experienced an upturn, reaching 47.4 in March compared to February's 45.9. However, since it still falls below 50, it indicates a consecutive sixth-month contraction in employment.
The Institute also conveyed that the prices index jumped to 55.8 in March from 52.5 in February, suggesting the ongoing instability in costs driven by commodities. The Institute is set to publish another report on the service sector's activity in March on Wednesday. Predictions suggest no change in the services PMI following its drop to 52.6 in February.
