Economy: ISM Manufacturing Index for March 2018

Earlier today, the Institute for Supply Management® (ISM®) released their Manufacturing Purchasing Manager's Index (PMI®) for March 2018:

Predicted: 60.0%
Actual: 59.3%

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Previous month: 60.8%

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Every month, the ISM surveys purchasing and supply executives at hundreds of companies across the country who are involved in manufacturing in some form. The resulting index is watched closely by academics, economists and investors because manufacturing accounts for about 12% of U.S. Gross Domestic Product (GDP).

The PMI is a reliable barometer of U.S. manufacturing: A PMI above 50% implies that U.S. manufacturing expanded during the month specified, while a reading below 50% implies that the made-in-the-USA sector contracted.

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From Today's Report:

"...Economic activity in the manufacturing sector expanded in March, and the overall economy grew for the 107th consecutive month, say the nation’s supply executives in the latest Manufacturing ISM® Report On Business®..."

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The following is a sampling of quotes from a diverse pool of U.S. manufacturers:

"Supply constraints, extended lead times, capacity constraints [and the like], particularly in the electronics components markets, continue to frustrate and drain needed resources, have delayed production schedules and, in some cases, caused missed or delayed sales opportunities.”
(Computer and Electronic Products)

“International demand is strong for our products in all regions. We are seeing constraints in multiple chemical supply chains due to increased global demand. We are concerned about the impact of tariff and trade wars on demand, but at this time, [there are] no signals that global demand is slowing.”
(Chemical Products)

“Production targets continue to be a struggle due to shortages of globally sourced components. Many subtier components are in short supply for multiple OEMs.”
(Transportation Equipment)

“In the U.S., we continue to struggle with finding carriers and drivers for shipments.”
(Food, Beverage and Tobacco Products)

“Much concern in the industry regarding the steel and aluminum tariffs recently [imposed]. This is causing panic buying, driving the near-term prices higher and [leading to] inventory shortages for non-contract customers.”
(Machinery)

“New tariffs are causing concern across the supply chain. Full impact will take a few weeks to reveal itself.”
(Miscellaneous Manufacturing)

“Significant price increases in the steel commodity due to 232 [the tariffs]. The price increases will begin to impact our company’s performance.”
(Primary Metals)

“Overall, incoming orders are picking up, and supplier pricing is increasing in some commodities.”
(Textile Mills)

“Hiring continues to slowly increase from February into March and capital spending was allowed a small increase. Oil market conditions have improved and continue to stabilize.”
(Petroleum and Coal Products)

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