The Institute for Supply Management’s (ISM) manufacturing index fell more than expected in March to its lowest level since May 2020. The drop in the index for new orders and employment was particularly noticeable.
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The data suggest that rising interest rates, growing recession fears and tighter lending conditions may be starting to weigh on business spending. In addition to this situation, the manufacturing sector is already facing difficulties on the demand side. This is because consumers are moving to shift the focus of discretionary spending toward services.
New orders in March fell to 44.3. Although the production index improved from the previous month, it remained in a contraction zone. The employment index fell to 46.9, the lowest level since July 2020. The index fell for the third straight month.
The delayed arrival index also fell to the lowest level in 14 years. Weak demand has helped ease disruptions in the supply chain. Inventories, which had been stable for the past few months, have also fallen and entered a contraction zone, reaching the lowest level in regarding two years.
The purchase price index also fell, suggesting lower costs.
See table for detailed statistics.
news-rsf-original-reference paywall">Original title:US Factory Gauge Falls to Lowest Since 2020, Employment Drops(excerpt)
March US ISM Manufacturing Falls to 46.3; Est. 47.5 (excerpt)
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