Economy

ISM: Manufacturing expanded in March to 18-month high

Written by Brett Linton

April 1, 2024

Following 16 months of contraction, US manufacturing activity expanded in March, according to the latest report from the Institute for Supply Management (ISM).

The ISM Manufacturing PMI rose to 50.3% in March, up 2.5 percentage points February. The index is now at the highest level recorded since September 2022. A reading above 50 indicates the manufacturing economy is growing, while a reading below 50 indicates contraction.

However, ISM said the overall economy expanded for the 47th straight month in February after one month of contraction in April 2020. The institute noted that a Manufacturing PMI above 42.5%, over a period of time, usually indicates the overall economy is expanding.

“Demand was positive, output strengthened, and inputs remained accommodative,” ISM Chair Timothy R. Fiore said in a statement. “Demand remains at the early stages of recovery, with clear signs of improving conditions.”

Steel market comments

The report showcased two survey responses related to the steel industry. One respondent in the fabricated metal sector noted that business remained strong and that his company was meeting forecasts. He added that customers and raw material suppliers are not voicing any negativity about the market.

An executive in primary metals shared his thoughts on improving business conditions. “Continue to experience a softness in the industrial sector,” he said. “There is optimism that order activity will increase in the late second quarter, leading to improvement in this segment for the second half of the year. The aerospace and defense market is continuing to ramp up, and demand is outpacing supply in our supply chain.”

Nine manufacturing industries reported growth in March, ISM said, including primary metals, fabricated metal products, and transportation equipment.

“Of the six biggest manufacturing industries, four — Food, Beverage, and Tobacco Products; Fabricated Metal Products; Chemical Products; and Transportation Equipment, which account for a combined 54% of manufacturing gross domestic product — registered growth in March,” the group said.

Brett Linton

Brett Linton is a senior analyst for Steel Market Update, where he began his career. Linton has been in the steel industry since 2010. He has held roles as a category manager and strategic insights director at Reibus before returning to SMU in 2024. He is a graduate of The University of North Georgia with a degree in Finance and Accounting. Brett can be reached at brett@steelmarketupdate.com or 724-314-0179.

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