The ISM Manufacturing index rose in March to 55.3. While the increase is a welcome reprieve, the sector still faces numerous challenges that will keep growth on a slower path relative to last year, explained analysts at Wells Fargo.
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“Fears that U.S. manufacturing activity is slowing dramatically will be calmed by today’s ISM report. The ISM manufacturing index rebounded 1.1 point in March to 55.3. Even when factoring in the improvement in March, however, the index continues to point to a cooling in the manufacturing sector since the end of last year.”
“Headwinds for the U.S. manufacturing sector as growth slows abroad showed few signs of abating in March. The export orders index fell to 51.7, its lowest level in two and a half years.”
“Global PMIs released ahead of the ISM for March were somewhat mixed, with activity in China looking a little better than analysts expected but Eurozone manufacturing still in the doldrums. The United States continues to shine by comparison, but with global demand weak and domestic growth slowing as the boost from last year’s fiscal stimulus fades, a meaningful rebound over the next few months remains a tall order.”
“Despite the indications of slowing growth the past few months, manufacturers reported to have stepped up hiring in March. The employment index jumped 5.2 points to 57.5 and is above the index’s average for the past year. The increase, along with a similar rebound in the regional Federal Reserve PMIs, points to a rebound in factory hiring in the March payrolls report due Friday after manufacturers added the fewest number of new workers in February in about a year and a half.”
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