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Updated: ISM Manufacturing Index Falls To 51.5% In March

By Kitco News
Wednesday April 1, 2015 10:00 AM

Editor's Note: The article was updated to include more information from the report.

(Kitco News) - The U.S. manufacturing sector barely remained in expansion territory in March as the sector has been steadily losing momentum since the start of the year, according to the latest data from the Institute for Supply Management (ISM).

Wednesday, the ISM said its Purchasing Managers Index showed a reading of 51.2% in March, down from February’s reading of 52.9%. According to consensus reports, economists expected to see a relatively small decline to 52.5%.

The report said that the manufacturing sector has expanded for 27 consecutive months. Readings above 50 in such diffusion indexes are seen as a sign of economic growth, and vice-versa.

“Comments from the panel refer to continuing challenges from the West Coast port issue, lower oil prices having both positive and negative impacts depending upon the industry, residual effects of the harsh winter, higher costs of healthcare premiums, and challenges associated with the stronger dollar on international business," the report said.

Looking at the components of the report, the new orders index fell to a reading of 51.8a%, a decrease of only 0.7 percentage points from February’s reading of 52.5%; at the same time the production index rose to 53.8%, up only 0.1 percentage point from February’s level of 53.7%.

Jobs in the manufacturing sector dropped last month as the ISM’s employment index showed a reading of 50%, down 1.4 percentage points from February’s reading of 51.4%.

The data also showed that price pressures are on the rise as the prices index rose to 39%, up 4 percentage points above February’s reading of 35%, “indicating lower raw materials prices for the fifth consecutive month.”

The manufacturing sector has struggled to maintain the pace set last year. Recent regional data has been weaker than expected. Tuesday, the Chicago Purchasing Managers Index, rose to 46.3, remaining in contraction territory. Earlier in the month, the New York Fed said that its Empire State manufacturing survey fell to a reading of 5.6, down from February’s level of 7.8.  The Philly Fed said its manufacturing business outlook survey fell to 5.0 from 5.2 in February.

 

By Neils Christensen of Kitco News; nchristensen@kitco.com
Follow Neils Christensen @neils_C

 

 

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.
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