Activity in the US manufacturing sector continued to expand in March, as nearly every industry reported growth, and none experiencing contraction, the Institute for Supply Management said Monday.
The ISM purchasing managers index slipped 0.5 percentage points to 57.2 last month, just below the 57.7 percent seen in February, which was the highest reading since August 2014.
It was the seventh consecutive month of expansion, and just above the consensus estimate among economists, who expected 57.0 percent.
Of the 18 industries surveyed, 17 reported growth and one was flat, ISM said.
In addition, all 18 industries reported increases in new orders.
“I can’t remember the last time that happened,” Bradley J. Holcomb, chair of ISM’s business survey committee, told reporters.
“This month and last are a tough act to follow.”
The new orders component was nearly a full point below the prior month, but still strong at 64.5 percent.
Employment also continues to rise in the sector, with that component jumping to 58.9 from 54.2, the highest since June 2011 and the sixth consecutive increase. ISM said 14 of the 18 industries reported increased employment.
Holcomb said that “certainly indicates a need for more employees to keep up with series of new orders.”
He also noted comments from purchasing managers in some industries citing difficulty finding workers with certain skills, which “all suggest high levels of employment and appetite for increasing employment ranks.”
That is in line with the continued job creation in the economy which have averaged 209,000 over the past three months. The Labor Department is due to release the March employment report Friday.
The one worrisome aspect of the ISM manufacturing report continues to be prices, which have been rising for 13 straight months, with the index up 2.5 points to 70.5 percent in March.
It was the highest reading for prices since May 2011, and 16 of the 18 industries surveyed reported paying higher prices for raw materials, or 47 percent, while only six percent reported lower prices.
“It’s something to watch closely as we go forward,” Holcomb said. However, managers report that they are able to pass along higher prices to customers.
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