US Manufacturing Extends Its Slump

The ISM Manufacturing PMI fell for the fifth straight month to its lowest level since May of 2020 as demand slowed

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Bill McColl
Bill McColl
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Published April 03, 2023
Manufacturing Employees

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Economic activity in the manufacturing sector contracted for the fifth straight month in March, reaching levels not seen since early in the pandemic, as demand slowed.

The Institute of Supply Management (ISM)'s Manufacturing Purchasing Managers' Index (PMI) fell to 46.3%, 1.4 percentage points below February’s reading and the lowest since May 2020. The new orders index slipped to 44.3% from 47%. Both were less than economists’ forecasts. Any reading under 50% indicates contraction.

The March report "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," explained Timothy Fiore, chair of the ISM Manufacturing Business Survey.

U.S. ISM Manufacturing PMI

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Mixed Feelings on Staffing

Fiore noted that the employment index went further into contraction territory, declining to 46.9% from 49.1% the month before. Estimates were for employment to expand. He said that those surveyed indicated equal levels of activity toward increasing or reducing headcounts, amid "mixed sentiment about the return of growth early in the second half of the year."

Fiore added that inflation eased, with the prices index falling from 51.3% to 49.2%.

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  1. Institute for Supply Management (ISM). "March 2023 Manufacturing ISM Report on Business."

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