PMI Index increase part of the spring thaw
As weather improves, index rises for second straight month
Manufacturing continued its spring thaw in March, as the monthly PMI Report from the Institute of Supply Management showed an increase to 53.7%. That's up five-tenths of a point from the February figure and more than 2 full points ahead of the January PMI.
Weather conditions in the U.S. have been blamed for much of the manufacturing slowdown after the PMI stayed around 56% in the second half of 2013. The rebound is slower than some economists expected, but the March numbers still mean 10 consecutive months of growth in the manufacturing sector.
"Employment grew for the ninth consecutive month, but at a lower rate by 1.2 percentage points, registering 51.1 percent compared to February's reading of 52.3 percent," said Bradley J. Holcomb, chairman of ISM's Manufacturing Business Survey Committee. "Several comments from the panel reflect favorable demand and good business conditions, with some lingering concerns about the particularly adverse weather conditions across the country."
Among the comments from survey respondents:
- "First quarter business still strong." (Fabricated Metal Products)
- "Business beginning to heat-up, along with the weather." (Petroleum & Coal Products)
- "Business is good and we are optimistic that orders will continue to come in at a decent pace." (Transportation Equipment)
- "Export orders are picking up - volume is improving although pricing, and thus profitability, are still challenged. Domestic business seems to be holding steady despite earlier predicted declines." (Chemical Products)
- "Weather has created major delays on inbound materials and outbound sales. We need spring." (Food, Beverage & Tobacco Products)
A PMI above 43.2% indicates an expansion in the overall economy, so March's figure marked the 58th straight month the PMI stayed above that growth level.
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Before the calendar turned, 2016 already had the makings of a pivotal year for manufacturing, and for the world.
There were the big events for the year, including the United States as Partner Country at Hannover Messe in April and the 2016 International Manufacturing Technology Show in Chicago in September. There's also the matter of the U.S. presidential elections in November, which promise to shape policy in manufacturing for years to come.
But the year started with global economic turmoil, as a slowdown in Chinese manufacturing triggered a worldwide stock hiccup that sent values plummeting. The continued plunge in world oil prices has resulted in a slowdown in exploration and, by extension, the manufacture of exploration equipment.
Read more: 2015 Salary Survey