The Institute for Supply Management said its manufacturing index hit 53.7 in March.
Expectations were for a reading of 54.0, up from 53.2.
The prices paid index fell to 59.0. Analysts expected a decline to 59.5 from 60.0 prior.
Employment slowed to 51.1 from 52.3.
Here are the anecdotes from the survey's "what respondents are saying" section:
- "Seeing improvement in the overall economy. Hearing strong bookings in residential contractor and home repair work." (Paper Products)
- "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)
- "Year starting off very good. Outlook very bright for 2014." (Computer & Electronic Products)
- New Orders, Employment and Production Growing
- Inventories Growing
- Supplier Deliveries Slowing
(Tempe, Arizona) - Economic activity in the manufacturing sector expanded in March for the 10th consecutive month, and theoverall economy grew for the 58th consecutive month, say the nation's supply executives in the latest Manufacturing ISM® Report On Business®.
The report was issued today by Bradley J. Holcomb, CPSM, CPSD, chair of the Institute for Supply Management® (ISM®) Manufacturing Business Survey Committee. "The March PMI® registered 53.7 percent, an increase of 0.5 percentage point from February's reading of 53.2 percent, indicating expansion in manufacturing for the 10th consecutive month. The New Orders Index registered 55.1 percent, an increase of 0.6 percentage point from February's reading of 54.5 percent. The Production Index registered 55.9 percent, a substantial increase of 7.7 percentage points compared to February's reading of 48.2 percent. 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. 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."
Of the 18 manufacturing industries, 14 are reporting growth in March in the following order: Petroleum & Coal Products; Transportation Equipment; Furniture & Related Products; Paper Products; Printing & Related Support Activities; Plastics & Rubber Products; Fabricated Metal Products; Machinery; Textile Mills; Computer & Electronic Products; Nonmetallic Mineral Products; Food, Beverage & Tobacco Products; Chemical Products; and Primary Metals. The four industries reporting contraction in March are: Apparel, Leather & Allied Products; Wood Products; Electrical Equipment, Appliances & Components; and Miscellaneous Manufacturing.
WHAT RESPONDENTS ARE SAYING ...
- "Seeing improvement in the overall economy. Hearing strong bookings in residential contractor and home repair work." (Paper Products)
- "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)
- "Year starting off very good. Outlook very bright for 2014." (Computer & Electronic Products)
- "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)
- "Short supply of hardwood lumber continues to challenge sales' ability to maximize volume targets. Demand is sound." (Wood Products)
- "Weather has created major delays on inbound materials and outbound sales. We need spring." (Food, Beverage & Tobacco Products)
- "Economy is looking positive and commodities are stable." (Machinery)
- "Business continues to improve." (Furniture & Related Products)
| MANUFACTURING AT A GLANCE MARCH 2014 | ||||||
|---|---|---|---|---|---|---|
Index | Series Index Mar | Series Index Feb | Percentage Point Change | Direction | Rate of Change | Trend* (Months) |
| PMI® | 53.7 | 53.2 | +0.5 | Growing | Faster | 10 |
| New Orders | 55.1 | 54.5 | +0.6 | Growing | Faster | 10 |
| Production | 55.9 | 48.2 | +7.7 | Growing | From Contracting | 1 |
| Employment | 51.1 | 52.3 | -1.2 | Growing | Slower | 9 |
| Supplier Deliveries | 54.0 | 58.5 | -4.5 | Slowing | Slower | 10 |
| Inventories | 52.5 | 52.5 | 0.0 | Growing | Same | 2 |
| Customers' Inventories | 42.0 | 46.5 | -4.5 | Too Low | Faster | 28 |
| Prices | 59.0 | 60.0 | -1.0 | Increasing | Slower | 8 |
| Backlog of Orders | 57.5 | 52.0 | +5.5 | Growing | Faster | 2 |
| Exports | 55.5 | 53.5 | +2.0 | Growing | Faster | 16 |
| Imports | 54.5 | 53.5 | +1.0 | Growing | Faster | 14 |
| OVERALL ECONOMY | Growing | Faster | 58 | |||
| Manufacturing Sector | Growing | Faster | 10 | |||
Manufacturing ISM® Report On Business® data is seasonally adjusted for New Orders, Production, Employment and Supplier Deliveries indexes.
*Number of months moving in current direction.
COMMODITIES REPORTED UP/DOWN IN PRICE and IN SHORT SUPPLY
Commodities Up in Price
Aluminum (2); Corn; Dairy (2); Diesel; Foam; Freight; Gasoline; HDPE (2); Lumber; MRO Supplies; Molybdenum; Nickel; Packaging (2); Plastic Resins (4); Polyethylene Resin; Stainless Steel; Steel* (4); and Wood (5).
Commodities Down in Price
Caustic Soda; Copper; Natural Gas; Steel*; Steel - Hot Rolled.
Commodities in Short Supply
The only commodity reported in short supply is Helium.
Note: The number of consecutive months the commodity is listed is indicated after each item.
*Reported as both up and down in price.
MARCH 2014 MANUFACTURING INDEX SUMMARIES
PMI®
Manufacturing expanded in March as the PMI® registered 53.7 percent, an increase of 0.5 percentage points when compared to February's reading of 53.2 percent. A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.
A PMI® in excess of 43.2 percent, over a period of time, generally indicates an expansion of the overall economy. Therefore, the March PMI® indicates growth for the 58th consecutive month in the overall economy, and indicates expansion in the manufacturing sector for the 10th consecutive month. Holcomb stated, "The past relationship between the PMI® and the overall economy indicates that the average PMI® for January through March (52.7 percent) corresponds to a 3.1 percent increase in real gross domestic product (GDP) on an annualized basis. In addition, if the PMI® for March (53.7 percent) is annualized, it corresponds to a 3.5 percent increase in real GDP annually."
THE LAST 12 MONTHS
| Month | PMI® | Month | PMI® | |
|---|---|---|---|---|
| Mar 2014 | 53.7 | Sep 2013 | 56.0 | |
| Feb 2014 | 53.2 | Aug 2013 | 56.3 | |
| Jan 2014 | 51.3 | Jul 2013 | 54.9 | |
| Dec 2013 | 56.5 | Jun 2013 | 52.5 | |
| Nov 2013 | 57.0 | May 2013 | 50.0 | |
| Oct 2013 | 56.6 | Apr 2013 | 50.0 | |
| Average for 12 months - 54.0 High - 57.0 Low - 50.0 |
||||
New Orders
ISM®'s New Orders Index registered 55.1 percent in March, an increase of 0.6 percentage point when compared to the February reading of 54.5 percent. This represents growth in new orders for the 10th consecutive month. A New Orders Index above 52.1 percent, over time, is generally consistent with an increase in the Census Bureau's series on manufacturing orders (in constant 2000 dollars).
The 11 industries reporting growth in new orders in March - listed in order - are: Textile Mills; Transportation Equipment; Machinery; Petroleum & Coal Products; Furniture & Related Products; Paper Products; Fabricated Metal Products; Primary Metals; Food, Beverage & Tobacco Products; Computer & Electronic Products; and Chemical Products. The three industries reporting a decrease in new orders during March are: Apparel, Leather & Allied Products; Wood Products; and Electrical Equipment, Appliances & Components.
| New Orders | % Better | % Same | % Worse | Net | Index |
|---|---|---|---|---|---|
| Mar 2014 | 35 | 52 | 13 | +22 | 55.1 |
| Feb 2014 | 35 | 49 | 16 | +19 | 54.5 |
| Jan 2014 | 27 | 54 | 19 | +8 | 51.2 |
| Dec 2013 | 34 | 52 | 14 | +20 | 64.4 |
Production
ISM®'s Production Index registered 55.9 percent in March, which is an increase of 7.7 percentage points when compared to the 48.2 percent reported in February. This represents the largest month-over-month increase in production since June 2009 when the increase was 12.7 percentage points. It also indicates a return to growth in production following only one month of contraction in the last 19 months. An index above 51.1 percent, over time, is generally consistent with an increase in the Federal Reserve Board's Industrial Production figures.
The 11 industries reporting growth in production during the month of March - listed in order - are: Paper Products; Primary Metals; Plastics & Rubber Products; Fabricated Metal Products; Transportation Equipment; Furniture & Related Products; Machinery; Chemical Products; Petroleum & Coal Products; Food, Beverage & Tobacco Products; and Computer & Electronic Products. The four industries reporting a decrease in production in March are: Apparel, Leather & Allied Products; Wood Products; Electrical Equipment, Appliances & Components; and Textile Mills.
Production | % Better | % Same | % Worse | Net | Index |
|---|---|---|---|---|---|
| Mar 2014 | 31 | 60 | 9 | +22 | 55.9 |
| Feb 2014 | 27 | 54 | 19 | +8 | 48.2 |
| Jan 2014 | 24 | 60 | 16 | +8 | 54.8 |
| Dec 2013 | 28 | 56 | 16 | +12 | 61.7 |
Employment
ISM®'s Employment Index registered 51.1 percent in March, which is a decrease of 1.2 percentage points when compared February's reading of 52.3 percentage points, and represents the ninth consecutive month of growth in employment. An Employment Index above 50.6 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) data on manufacturing employment.
Of the 18 manufacturing industries, 10 reported growth in employment in March in the following order: Printing & Related Support Activities; Furniture & Related Products; Petroleum & Coal Products; Paper Products; Transportation Equipment; Machinery; Chemical Products; Fabricated Metal Products; Computer & Electronic Products; and Miscellaneous Manufacturing. The five industries reporting a decrease in employment in March are: Apparel, Leather & Allied Products; Textile Mills; Electrical Equipment, Appliances & Components; Primary Metals; and Food, Beverage & Tobacco Products.
Employment | % Higher | % Same | % Lower | Net | Index |
|---|---|---|---|---|---|
| Mar 2014 | 21 | 64 | 15 | +6 | 51.1 |
| Feb 2014 | 20 | 67 | 13 | +7 | 52.3 |
| Jan 2014 | 16 | 70 | 14 | +2 | 52.3 |
| Dec 2013 | 19 | 68 | 13 | +6 | 55.8 |
Supplier Deliveries
The delivery performance of suppliers to manufacturing organizations slowed in March at a slower rate relative to February as the Supplier Deliveries Index registered 54 percent. This month's reading is 4.5 percentage points lower than the 58.5 percent reported in February. A reading below 50 percent indicates faster deliveries, while a reading above 50 percent indicates slower deliveries.
The nine industries reporting slower supplier deliveries in March - listed in order - are: Plastics & Rubber Products; Computer & Electronic Products; Nonmetallic Mineral Products; Chemical Products; Food, Beverage & Tobacco Products; Paper Products; Fabricated Metal Products; Machinery; and Transportation Equipment. The three industries reporting faster supplier deliveries in March are: Textile Mills; Electrical Equipment, Appliances & Components; and Miscellaneous Manufacturing. Six industries reported no change in supplier deliveries in March compared to February.
| Supplier Deliveries | % Slower | % Same | % Faster | Net | Index |
|---|---|---|---|---|---|
| Mar 2014 | 16 | 79 | 5 | +11 | 54.0 |
| Feb 2014 | 17 | 82 | 1 | +16 | 58.5 |
| Jan 2014 | 15 | 80 | 5 | +10 | 54.3 |
| Dec 2013 | 12 | 79 | 9 | +3 | 53.7 |
Inventories*
The Inventories Index registered 52.5 percent in March, the same reading as reported in February, and indicates that inventories are growing for the second consecutive month, following two consecutive months of contraction. An Inventories Index greater than 42.8 percent, over time, is generally consistent with expansion in the Bureau of Economic Analysis' (BEA) figures on overall manufacturing inventories (in chained 2000 dollars).
The 12 industries reporting higher inventories in March - listed in order - are: Textile Mills; Printing & Related Support Activities; Petroleum & Coal Products; Nonmetallic Mineral Products; Plastics & Rubber Products; Transportation Equipment; Furniture & Related Products; Paper Products; Food, Beverage & Tobacco Products; Fabricated Metal Products; Computer & Electronic Products; and Electrical Equipment, Appliances & Components. The four industries reporting decreases in inventories in March are: Primary Metals; Miscellaneous Manufacturing; Chemical Products; and Machinery.
Inventories | % Higher | % Same | % Lower | Net | Index |
|---|---|---|---|---|---|
| Mar 2014 | 20 | 65 | 15 | +5 | 52.5 |
| Feb 2014 | 24 | 57 | 19 | +5 | 52.5 |
| Jan 2014 | 14 | 60 | 26 | -12 | 44.0 |
| Dec 2013 | 16 | 62 | 22 | -6 | 47.0 |
Customers' Inventories*
ISM®'s Customers' Inventories Index registered 42 percent in March, which is 4.5 percentage points lower than in February when the index registered 46.5 percent. This month's reading indicates that customers' inventories are considered too low, and is the lowest reading since May 2011 when the Customers' Inventories Index registered 39.5 percent. Customers' inventories have registered at or below 50 percent for 60 consecutive months. A reading below 50 percent indicates customers' inventories are considered too low.
The only manufacturing industry reporting customers' inventories as being too high during the month of March is Food, Beverage & Tobacco Products. The 11 industries reporting customers' inventories as too low during March - listed in order - are: Plastics & Rubber Products; Textile Mills; Electrical Equipment, Appliances & Components; Furniture & Related Products; Transportation Equipment; Computer & Electronic Products; Fabricated Metal Products; Machinery; Paper Products; Miscellaneous Manufacturing; and Chemical Products. Six industries reported no change in customers' inventories in March compared to February.
| Customers' Inventories | % Reporting | %Too High | %About Right | %Too Low | Net | Index |
|---|---|---|---|---|---|---|
| Mar 2014 | 60 | 8 | 68 | 24 | -16 | 42.0 |
| Feb 2014 | 61 | 16 | 61 | 23 | -7 | 46.5 |
| Jan 2014 | 66 | 9 | 70 | 21 | -12 | 44.0 |
| Dec 2013 | 67 | 16 | 63 | 21 | -5 | 47.5 |
Prices*
The ISM® Prices Index registered 59 percent in March, which is a decrease of 1 percentage point compared to the February reading of 60 percent. In March, 28 percent of respondents reported paying higher prices, 10 percent reported paying lower prices, and 62 percent of supply executives reported paying the same prices as in February. A Prices Index above 49.7 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) Index of Manufacturers Prices.
Of the 18 manufacturing industries, 12 reported paying increased prices during the month of March in the following order: Food, Beverage & Tobacco Products; Wood Products; Plastics & Rubber Products; Apparel, Leather & Allied Products; Furniture & Related Products; Petroleum & Coal Products; Miscellaneous Manufacturing; Textile Mills; Chemical Products; Electrical Equipment, Appliances & Components; Paper Products; and Machinery. The four industries reporting paying lower prices during the month of March are: Computer & Electronic Products; Transportation Equipment; Fabricated Metal Products; and Primary Metals.
Prices | % Higher | % Same | % Lower | Net | Index |
|---|---|---|---|---|---|
| Mar 2014 | 28 | 62 | 10 | +18 | 59.0 |
| Feb 2014 | 27 | 66 | 7 | +20 | 60.0 |
| Jan 2014 | 28 | 65 | 7 | +21 | 60.5 |
| Dec 2013 | 20 | 67 | 13 | +7 | 53.5 |
Backlog of Orders*
ISM®'s Backlog of Orders Index registered 57.5 percent in March, which is 5.5 percentage points higher than the 52 percent reported in February, indicating notable growth in order backlogs relative to February. Of the 86 percent of respondents who reported their backlog of orders, 28 percent reported greater backlogs, 13 percent reported smaller backlogs, and 59 percent reported no change from February.
The 14 industries reporting increased order backlogs in March - listed in order - are: Textile Mills; Paper Products; Nonmetallic Mineral Products; Furniture & Related Products; Transportation Equipment; Plastics & Rubber Products; Machinery; Primary Metals; Fabricated Metal Products; Computer & Electronic Products; Miscellaneous Manufacturing; Chemical Products; Food, Beverage & Tobacco Products; and Electrical Equipment, Appliances & Components. The only industry reporting a decrease in order backlogs during March is Apparel, Leather & Allied Products.
| Backlog of Orders | % Reporting | % Greater | % Same | % Less | Net | Index |
|---|---|---|---|---|---|---|
| Mar 2014 | 86 | 28 | 59 | 13 | +15 | 57.5 |
| Feb 2014 | 85 | 22 | 60 | 18 | +4 | 52.0 |
| Jan 2014 | 83 | 19 | 58 | 23 | -4 | 48.0 |
| Dec 2013 | 87 | 23 | 57 | 20 | +3 | 51.5 |
New Export Orders*
ISM®'s New Export Orders Index registered 55.5 percent in March, which is 2 percentage points higher than the 53.5 percent reported in February. March's reading reflects growth in the level of exports for the 16th consecutive month.
The 11 industries reporting growth in new export orders in March - listed in order - are: Wood Products; Furniture & Related Products; Transportation Equipment; Textile Mills; Petroleum & Coal Products; Machinery; Fabricated Metal Products; Electrical Equipment, Appliances & Components; Chemical Products; Food, Beverage & Tobacco Products; and Computer & Electronic Products. The five industries reporting a decrease in new export orders during March are: Nonmetallic Mineral Products; Apparel, Leather & Allied Products; Miscellaneous Manufacturing; Primary Metals; and Paper Products.
| New Export Orders | % Reporting | % Higher | % Same | % Lower | Net | Index |
|---|---|---|---|---|---|---|
| Mar 2014 | 75 | 21 | 69 | 10 | +11 | 55.5 |
| Feb 2014 | 76 | 16 | 75 | 9 | +7 | 53.5 |
| Jan 2014 | 77 | 17 | 75 | 8 | +9 | 54.5 |
| Dec 2013 | 76 | 17 | 76 | 7 | +10 | 55.0 |
Imports*
ISM®'s Imports Index registered 54.5 percent in March, which is 1 percentage point higher than the 53.5 percent reported in February. This month's reading represents 14 consecutive months of growth in imports.
The nine industries reporting growth in imports during the month of March - listed in order - are: Primary Metals; Petroleum & Coal Products; Transportation Equipment; Plastics & Rubber Products; Furniture & Related Products; Machinery; Computer & Electronic Products; Chemical Products; and Food, Beverage & Tobacco Products. The five industries reporting a decrease in imports during March are: Printing & Related Support Activities; Apparel, Leather & Allied Products; Electrical Equipment, Appliances & Components; Miscellaneous Manufacturing; and Fabricated Metal Products.
Imports | % Reporting | % Higher | % Same | % Lower | Net | Index |
|---|---|---|---|---|---|---|
| Mar 2014 | 78 | 18 | 73 | 9 | +9 | 54.5 |
| Feb 2014 | 78 | 17 | 73 | 10 | +7 | 53.5 |
| Jan 2014 | 79 | 18 | 71 | 11 | +7 | 53.5 |
| Dec 2013 | 79 | 19 | 72 | 9 | +10 | 55.0 |
* The Inventories, Customers' Inventories, Prices, Backlog of Orders, New Export Orders and Imports Indexes do not meet the accepted criteria for seasonal adjustments.
Buying Policy
Average commitment lead time for Capital Expenditures decreased 16 days to 121 days. Average lead time for Production Materials increased by 1 day to 59 days. Average lead time for Maintenance, Repair and Operating (MRO) Supplies increased 1 day to 28 days.
| Percent Reporting | |||||||
|---|---|---|---|---|---|---|---|
Capital Expenditures | Hand- to- Mouth | 30 Days | 60 Days | 90 Days | 6 Months | 1 Year+ | Average Days |
| Mar 2014 | 28 | 5 | 11 | 18 | 23 | 15 | 121 |
| Feb 2014 | 23 | 6 | 12 | 15 | 25 | 19 | 137 |
| Jan 2014 | 23 | 5 | 14 | 17 | 25 | 16 | 129 |
| Dec 2013 | 31 | 6 | 13 | 15 | 23 | 12 | 109 |
Production Materials | Hand- to- Mouth | 30 Days | 60 Days | 90 Days | 6 Months | 1 Year+ | Average Days |
| Mar 2014 | 13 | 39 | 25 | 15 | 6 | 2 | 59 |
| Feb 2014 | 19 | 34 | 22 | 19 | 3 | 3 | 58 |
| Jan 2014 | 15 | 38 | 25 | 14 | 5 | 3 | 60 |
| Dec 2013 | 15 | 35 | 27 | 16 | 4 | 3 | 60 |
MRO Supplies | Hand- to- Mouth | 30 Days | 60 Days | 90 Days | 6 Months | 1 Year+ | Average Days |
| Mar 2014 | 41 | 40 | 14 | 4 | 1 | 0 | 28 |
| Feb 2014 | 44 | 38 | 13 | 4 | 1 | 0 | 27 |
| Jan 2014 | 44 | 41 | 11 | 3 | 1 | 0 | 26 |
| Dec 2013 | 43 | 38 | 13 | 4 | 2 | 0 | 29 |