2 pieces of key US factory data plunge the most since 2009 as coronavirus wreckage spreads
- The ISM manufacturing index fell to 49.1 in March, down from 50.1 in February, according to a Wednesday report.
- Bookings, employment, and production all fell sharply as the coronavirus pandemic hits business activity.
"Comments from the panel were negative regarding the near-term outlook, with sentiment clearly impacted by the coronavirus (COVID-19) pandemic and energy market volatility," Timothy Fiore, the chair of the Institute for Supply Management, said in a statement.
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US manufacturing orders and employment fell the most in 11 years in March as the coronavirus pandemic slows business activity, signaling an economic contraction.
Institute for Supply Management data released Wednesday showed that the manufacturing index fell to 49.1 last month from 50 in February. Any reading less than 50 indicates a contraction, or declining activity.
New orders or bookings fell 7.6 percentage points to 42.2, the lowest reading since March 2009, while the employment index slipped 3.1 percentage points to 43.8, its weakest since May 2009.
"The coronavirus pandemic and shocks in global energy markets have impacted all manufacturing sectors," Timothy Fiore, the chair of the Institute for Supply Management, said in a statement.
He continued: "Comments from the panel were negative regarding the near-term outlook, with sentiment clearly impacted by the coronavirus (COVID-19) pandemic and energy market volatility. The PMI® returned to contraction territory, and with a negative trajectory."
Still, the report was not as bad as economists expected. The consensus estimate was that ISM's factory index would decline to 44.5, according to Bloomberg data. Instead, a 7.7 point jump to 65% in the supplier deliveries index in March limited the overall decline in PMI.
The high reading was mostly due to coronavirus-related supply chain problems, according to the report. Of the 18 manufacturing industries tracked in the report, 10 showed growth in March.
Production also fell in March to 47.7% from 50.3% in February. In addition, the ISM prices index fell 8.5 percentage points to 37.4% in March, weighed down partly by falling oil prices fueled by a price war between Saudi Arabia and Russia.
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