The nation's manufacturing sector strengthened a little further in March, with a report from the Institute for Supply Management (ISM), the Tempe, Arizona-based trade group, indicating that this key gauge of industrial activity had firmed up to a reading of 53.4 in the latest month. In February, the survey result had come in at 52.4. A reading above 50.0 is consistent with an expanding manufacturing sector; a survey result below the 50.0 level signals that manufacturing is contracting.
The latest result was somewhat better than the reading of 53.0 that had been the consensus expectation. Overall, the March score made it 34 months in a row that manufacturing has been expanding in this country. In the past 12 months, the level of expansion has held within a range of 51.4 (last July) to 59.7 (Last April).
This report contrasts with a less-than-stellar survey result issued by the purchasing managers across the euro zone this morning. That group, the equivalent of this nation's ISM, reported that manufacturing slipped further last month, declining to a reading of just 47.7 from February's survey result of 49.0. Worse, in France, the euro zone's second largest economy, the manufacturing score came in at only 46.7. The euro zone, it would seem, is in a recession at this time.
Happily, however, that does not seem to be the case on our shores, as this nation's industrial base continues to expand, albeit slowly and irregularly. Meanwhile, within this overall ISM range of 53.4 last month, we saw new orders ease its rate of growth, with that score going from February's 54.9 to 54.5 last month. On the other hand, production ramped up further, increasing from 55.3 to 58.3, while employment rose from 53.2 to 56.1. This latter metric is quite telling, as the nation will be receiving the U.S. non-farm payroll report this Friday. An increase of more than 200,000 jobs is expected at that time, which would mark the fourth month in a row that growth has been at or above this level.
As for comments by purchasing managers, we saw that business was strong in chemical products, driven by healthy demand for exports and stable raw materials pricing. Upbeat conditions also were reported by machinery purchasing managers and in fabricated metal products and primary metals, while they were stable in computer and electronic products.
Taken as a whole, the report was a positive one and represented one more data issuance showing that the nation's economy was continuing to press forward, even as China appeared to be slowing and, as noted, the euro zone now seems locked in a recession.
At the time of this article's writing, the author did not have positions in any of the companies mentioned.