Prior was 52.4
Today’s March release showed the PMI rising to 52.3 from 51.6 in February, marking the eighth consecutive month above the 50.0 threshold and pointing to a moderate and accelerating pace of expansion. Both output and new orders posted solid gains, supported in part by precautionary safety stock building as firms sought to lock in supply and prices following the outbreak of war in the Middle East. However, growth was principally driven by domestic demand, as international sales continued to decline under the weight of tariffs and shipping disruptions.
The conflict’s impact was most visible on the cost and supply side. Input price inflation surged to its highest level since August, fueled by rising energy and fuel costs alongside ongoing tariff-related pressures on aluminum and steel. Factory gate price inflation hit a seven-month high as manufacturers passed on costs where possible. Supplier delivery times deteriorated at the sharpest rate since October 2022, with the war exacerbating existing shipping and port delays. Finished goods inventories fell for the first time in eight months as firms shipped directly from stock to compensate for production delays.
Despite the pickup in activity, firms were cautious on hiring—staffing levels were broadly unchanged, with some companies opting not to replace departing workers. Business confidence remained positive but edged slightly lower, with energy prices and tariffs cited as key risks to the outlook.
For background, the S&P Global U.S. Manufacturing PMI is compiled from survey responses from purchasing managers at around 600 American manufacturers, stratified by sector and company size based on GDP contributions. Data are collected in the second half of each month. The headline PMI is a weighted average of five subindices—new orders, output, employment, supplier delivery times, and stocks of purchases—with readings above 50 signaling expansion.
Chris Williamson, Chief Business Economist at S&P
Global Market Intelligence
“Faster growth of output in March points to encouraging
resilience for US manufacturing in the face of the
outbreak of war in the Middle East. Business confidence
regarding output in the year ahead has also so far
held up well. This sustained resilience in part reflects
reduced concerns over government policies such as
tariffs, but also indicates that producers anticipate only
a short-term and modest impact from the war, which is
clearly uncertain.
“It remains early days in terms of the impact of the
conflict, and a sharp rise in prices and delivery delays
has cast a cloud over the outlook, threatening to drive
inflation higher, dampen demand and throttle supply
chains. Factory input costs have already jumped higher
on the back of surging oil prices and supplier delays
have become more widespread than at any time since
October 2022, linked to the war exacerbating existing
shipping, haulage and port delays.
“Some manufacturers are hence reporting stock building
as a precaution against future price rises or supply
shortages, and hiring has almost stalled in order to
reduce staffing costs, underscoring the growing concern
about how the war might cause problems for factories
in the coming weeks. If price pressures and supply
delays persist, demand, employment and production
capabilities will inevitably start to be more seriously
affected.”
Resilience is a nice theme to build on.
This article was written by Adam Button at investinglive.com.